Stock Analysis on Net

Walgreens Boots Alliance Inc. (NASDAQ:WBA)

This company has been moved to the archive! The financial data has not been updated since July 9, 2020.

Analysis of Operating Leases

Microsoft Excel

An operating lease is treated like a rental contract. Neither the leased asset nor the associated liability is reported on the lessee balance sheet, but the rights may be very similar to the rights of an owner. The lessee only records the lease payments as a rental expense in income statement.


Present Value of Future Operating Lease Payments (before Adoption of FASB Topic 842)

Walgreens Boots Alliance Inc., future operating lease payments (before adoption of FASB Topic 842)

US$ in millions

Microsoft Excel
Aug 31, 2019 Aug 31, 2018 Aug 31, 2017 Aug 31, 2016 Aug 31, 2015 Aug 31, 2014
Total undiscounted future operating lease payments 32,268 32,736 32,811 34,089 37,970 34,465
Discount rate1 3.49% 3.55% 3.60% 3.28% 3.45% 3.14%
 
Total present value of future operating lease payments 26,628 26,624 26,194 27,480 29,803 27,399

Based on: 10-K (reporting date: 2019-08-31), 10-K (reporting date: 2018-08-31), 10-K (reporting date: 2017-08-31), 10-K (reporting date: 2016-08-31), 10-K (reporting date: 2015-08-31), 10-K (reporting date: 2014-08-31).

1 Weighted-average interest rate for Walgreens Boots Alliance Inc. debt

Year Future operating lease payments (as reported) Year Future operating lease payments (estimated) Present value at 3.49%
2020 3,484 2020 3,484 3,367
2021 3,323 2021 3,323 3,103
2022 3,124 2022 3,124 2,818
2023 2,943 2023 2,943 2,566
2024 2,771 2024 2,771 2,334
2025 and thereafter 16,623 2025 2,771 2,256
2026 2,771 2,179
2027 2,771 2,106
2028 2,771 2,035
2029 2,771 1,966
2030 2,768 1,898
Total: 32,268 32,268 26,628

Based on: 10-K (reporting date: 2019-08-31).

Year Future operating lease payments (as reported) Year Future operating lease payments (estimated) Present value at 3.55%
2019 3,528 2019 3,528 3,407
2020 3,304 2020 3,304 3,081
2021 3,028 2021 3,028 2,727
2022 2,762 2022 2,762 2,402
2023 2,522 2023 2,522 2,118
2024 and thereafter 17,592 2024 2,522 2,046
2025 2,522 1,976
2026 2,522 1,908
2027 2,522 1,842
2028 2,522 1,779
2029 2,522 1,718
2030 2,460 1,619
Total: 32,736 32,736 26,624

Based on: 10-K (reporting date: 2018-08-31).

Year Future operating lease payments (as reported) Year Future operating lease payments (estimated) Present value at 3.60%
2018 3,210 2018 3,210 3,098
2019 3,045 2019 3,045 2,837
2020 2,844 2020 2,844 2,558
2021 2,605 2021 2,605 2,261
2022 2,371 2022 2,371 1,987
2023 and thereafter 18,736 2023 2,371 1,918
2024 2,371 1,851
2025 2,371 1,787
2026 2,371 1,725
2027 2,371 1,665
2028 2,371 1,607
2029 2,371 1,551
2030 2,139 1,351
Total: 32,811 32,811 26,194

Based on: 10-K (reporting date: 2017-08-31).

Year Future operating lease payments (as reported) Year Future operating lease payments (estimated) Present value at 3.28%
2017 3,066 2017 3,066 2,969
2018 2,972 2018 2,972 2,786
2019 2,826 2019 2,826 2,565
2020 2,632 2020 2,632 2,313
2021 2,403 2021 2,403 2,045
2022 and thereafter 20,190 2022 2,403 1,980
2023 2,403 1,917
2024 2,403 1,856
2025 2,403 1,797
2026 2,403 1,740
2027 2,403 1,685
2028 2,403 1,631
2029 2,403 1,580
2030 966 615
Total: 34,089 34,089 27,480

Based on: 10-K (reporting date: 2016-08-31).

Year Future operating lease payments (as reported) Year Future operating lease payments (estimated) Present value at 3.45%
2016 3,141 2016 3,141 3,036
2017 3,008 2017 3,008 2,811
2018 2,944 2018 2,944 2,659
2019 2,734 2019 2,734 2,387
2020 2,518 2020 2,518 2,125
2021 and thereafter 23,625 2021 2,518 2,054
2022 2,518 1,986
2023 2,518 1,920
2024 2,518 1,856
2025 2,518 1,794
2026 2,518 1,734
2027 2,518 1,676
2028 2,518 1,620
2029 2,518 1,566
2030 963 579
Total: 37,970 37,970 29,803

Based on: 10-K (reporting date: 2015-08-31).

Year Future operating lease payments (as reported) Year Future operating lease payments (estimated) Present value at 3.14%
2015 2,569 2015 2,569 2,491
2016 2,533 2016 2,533 2,381
2017 2,493 2017 2,493 2,272
2018 2,407 2018 2,407 2,127
2019 2,295 2019 2,295 1,966
2020 and thereafter 22,168 2020 2,295 1,906
2021 2,295 1,848
2022 2,295 1,792
2023 2,295 1,738
2024 2,295 1,685
2025 2,295 1,633
2026 2,295 1,584
2027 2,295 1,535
2028 2,295 1,489
2029 1,513 952
Total: 34,465 34,465 27,399

Based on: 10-K (reporting date: 2014-08-31).


Adjustments to Financial Statements for Operating Leases

Walgreens Boots Alliance Inc., adjustments to financial statements

US$ in millions

Microsoft Excel
Aug 31, 2019 Aug 31, 2018 Aug 31, 2017 Aug 31, 2016 Aug 31, 2015 Aug 31, 2014
Adjustment to Total Assets
Total assets (as reported) 67,598 68,124 66,009 72,688 68,782 37,182
Add: Operating lease right-of-use asset (before adoption of FASB Topic 842)1 26,628 26,624 26,194 27,480 29,803 27,399
Total assets (adjusted) 94,226 94,748 92,203 100,168 98,585 64,581
Adjustment to Total Debt
Total debt (as reported) 16,836 14,397 12,935 19,028 14,383 4,510
Add: Operating lease liability (before adoption of FASB Topic 842)2 26,628 26,624 26,194 27,480 29,803 27,399
Total debt (adjusted) 43,464 41,021 39,129 46,508 44,186 31,909

Based on: 10-K (reporting date: 2019-08-31), 10-K (reporting date: 2018-08-31), 10-K (reporting date: 2017-08-31), 10-K (reporting date: 2016-08-31), 10-K (reporting date: 2015-08-31), 10-K (reporting date: 2014-08-31).

1, 2 Equal to total present value of future operating lease payments.


Walgreens Boots Alliance Inc., Financial Data: Reported vs. Adjusted


Adjusted Financial Ratios for Operating Leases (Summary)

Walgreens Boots Alliance Inc., adjusted financial ratios

Microsoft Excel
Aug 31, 2019 Aug 31, 2018 Aug 31, 2017 Aug 31, 2016 Aug 31, 2015 Aug 31, 2014
Total Asset Turnover1
Reported total asset turnover 2.02 1.93 1.79 1.61 1.50 2.05
Adjusted total asset turnover 1.45 1.39 1.28 1.17 1.05 1.18
Debt to Equity2
Reported debt to equity 0.72 0.55 0.47 0.64 0.47 0.22
Adjusted debt to equity 1.85 1.58 1.42 1.56 1.43 1.56
Return on Assets3 (ROA)
Reported ROA 5.89% 7.37% 6.18% 5.74% 6.14% 5.20%
Adjusted ROA 4.23% 5.30% 4.42% 4.17% 4.28% 2.99%

Based on: 10-K (reporting date: 2019-08-31), 10-K (reporting date: 2018-08-31), 10-K (reporting date: 2017-08-31), 10-K (reporting date: 2016-08-31), 10-K (reporting date: 2015-08-31), 10-K (reporting date: 2014-08-31).

Financial ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Walgreens Boots Alliance Inc. adjusted total asset turnover ratio improved from 2017 to 2018 and from 2018 to 2019.
Adjusted debt to equity A solvency ratio calculated as adjusted total debt divided by total shareholders’ equity. Walgreens Boots Alliance Inc. adjusted debt to equity ratio deteriorated from 2017 to 2018 and from 2018 to 2019.
Adjusted ROA A profitability ratio calculated as net income divided by adjusted total assets. Walgreens Boots Alliance Inc. adjusted ROA improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019.

Walgreens Boots Alliance Inc., Financial Ratios: Reported vs. Adjusted


Adjusted Total Asset Turnover

Microsoft Excel
Aug 31, 2019 Aug 31, 2018 Aug 31, 2017 Aug 31, 2016 Aug 31, 2015 Aug 31, 2014
As Reported
Selected Financial Data (US$ in millions)
Sales 136,866 131,537 118,214 117,351 103,444 76,392
Total assets 67,598 68,124 66,009 72,688 68,782 37,182
Activity Ratio
Total asset turnover1 2.02 1.93 1.79 1.61 1.50 2.05
Adjusted for Operating Leases
Selected Financial Data (US$ in millions)
Sales 136,866 131,537 118,214 117,351 103,444 76,392
Adjusted total assets 94,226 94,748 92,203 100,168 98,585 64,581
Activity Ratio
Adjusted total asset turnover2 1.45 1.39 1.28 1.17 1.05 1.18

Based on: 10-K (reporting date: 2019-08-31), 10-K (reporting date: 2018-08-31), 10-K (reporting date: 2017-08-31), 10-K (reporting date: 2016-08-31), 10-K (reporting date: 2015-08-31), 10-K (reporting date: 2014-08-31).

2019 Calculations

1 Total asset turnover = Sales ÷ Total assets
= 136,866 ÷ 67,598 = 2.02

2 Adjusted total asset turnover = Sales ÷ Adjusted total assets
= 136,866 ÷ 94,226 = 1.45

Activity ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Walgreens Boots Alliance Inc. adjusted total asset turnover ratio improved from 2017 to 2018 and from 2018 to 2019.

Adjusted Debt to Equity

Microsoft Excel
Aug 31, 2019 Aug 31, 2018 Aug 31, 2017 Aug 31, 2016 Aug 31, 2015 Aug 31, 2014
As Reported
Selected Financial Data (US$ in millions)
Total debt 16,836 14,397 12,935 19,028 14,383 4,510
Total Walgreens Boots Alliance, Inc. shareholders’ equity 23,512 26,007 27,466 29,880 30,861 20,457
Solvency Ratio
Debt to equity1 0.72 0.55 0.47 0.64 0.47 0.22
Adjusted for Operating Leases
Selected Financial Data (US$ in millions)
Adjusted total debt 43,464 41,021 39,129 46,508 44,186 31,909
Total Walgreens Boots Alliance, Inc. shareholders’ equity 23,512 26,007 27,466 29,880 30,861 20,457
Solvency Ratio
Adjusted debt to equity2 1.85 1.58 1.42 1.56 1.43 1.56

Based on: 10-K (reporting date: 2019-08-31), 10-K (reporting date: 2018-08-31), 10-K (reporting date: 2017-08-31), 10-K (reporting date: 2016-08-31), 10-K (reporting date: 2015-08-31), 10-K (reporting date: 2014-08-31).

2019 Calculations

1 Debt to equity = Total debt ÷ Total Walgreens Boots Alliance, Inc. shareholders’ equity
= 16,836 ÷ 23,512 = 0.72

2 Adjusted debt to equity = Adjusted total debt ÷ Total Walgreens Boots Alliance, Inc. shareholders’ equity
= 43,464 ÷ 23,512 = 1.85

Solvency ratio Description The company
Adjusted debt-to-equity A solvency ratio calculated as adjusted total debt divided by total shareholders’ equity. Walgreens Boots Alliance Inc. adjusted debt-to-equity ratio deteriorated from 2017 to 2018 and from 2018 to 2019.

Adjusted Return on Assets (ROA)

Microsoft Excel
Aug 31, 2019 Aug 31, 2018 Aug 31, 2017 Aug 31, 2016 Aug 31, 2015 Aug 31, 2014
As Reported
Selected Financial Data (US$ in millions)
Net earnings attributable to Walgreens Boots Alliance, Inc. 3,982 5,024 4,078 4,173 4,220 1,932
Total assets 67,598 68,124 66,009 72,688 68,782 37,182
Profitability Ratio
ROA1 5.89% 7.37% 6.18% 5.74% 6.14% 5.20%
Adjusted for Operating Leases
Selected Financial Data (US$ in millions)
Net earnings attributable to Walgreens Boots Alliance, Inc. 3,982 5,024 4,078 4,173 4,220 1,932
Adjusted total assets 94,226 94,748 92,203 100,168 98,585 64,581
Profitability Ratio
Adjusted ROA2 4.23% 5.30% 4.42% 4.17% 4.28% 2.99%

Based on: 10-K (reporting date: 2019-08-31), 10-K (reporting date: 2018-08-31), 10-K (reporting date: 2017-08-31), 10-K (reporting date: 2016-08-31), 10-K (reporting date: 2015-08-31), 10-K (reporting date: 2014-08-31).

2019 Calculations

1 ROA = 100 × Net earnings attributable to Walgreens Boots Alliance, Inc. ÷ Total assets
= 100 × 3,982 ÷ 67,598 = 5.89%

2 Adjusted ROA = 100 × Net earnings attributable to Walgreens Boots Alliance, Inc. ÷ Adjusted total assets
= 100 × 3,982 ÷ 94,226 = 4.23%

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as net income divided by adjusted total assets. Walgreens Boots Alliance Inc. adjusted ROA improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019.