Microsoft Excel LibreOffice Calc

Walgreens Boots Alliance Inc. (NASDAQ:WBA)

Analysis of Solvency Ratios

Beginner level

Solvency ratios also known as long-term debt ratios measure a company’s ability to meet long-term obligations.

Solvency Ratios (Summary)

Walgreens Boots Alliance Inc., solvency ratios

Microsoft Excel LibreOffice Calc
Aug 31, 2019 Aug 31, 2018 Aug 31, 2017 Aug 31, 2016 Aug 31, 2015 Aug 31, 2014
Debt Ratios
Debt to equity 0.72 0.55 0.47 0.64 0.47 0.22
Debt to capital 0.42 0.36 0.32 0.39 0.32 0.18
Debt to assets 0.25 0.21 0.20 0.26 0.21 0.12
Financial leverage 2.88 2.62 2.40 2.43 2.23 1.82
Coverage Ratios
Interest coverage 7.46 10.79 8.01 9.70 9.82 23.80
Fixed charge coverage 2.05 2.48 2.23 2.31 2.41 2.25

Based on: 10-K (filing date: 2019-10-28), 10-K (filing date: 2018-10-11), 10-K (filing date: 2017-10-25), 10-K (filing date: 2016-10-20), 10-K (filing date: 2015-10-28), 10-K (filing date: 2014-10-20).

Solvency ratio Description The company
Debt to equity ratio A solvency ratio calculated as total debt divided by total shareholders’ equity. Walgreens Boots Alliance Inc.’s debt to equity ratio deteriorated from 2017 to 2018 and from 2018 to 2019.
Debt to capital ratio A solvency ratio calculated as total debt divided by total debt plus shareholders’ equity. Walgreens Boots Alliance Inc.’s debt to capital ratio deteriorated from 2017 to 2018 and from 2018 to 2019.
Debt to assets ratio A solvency ratio calculated as total debt divided by total assets. Walgreens Boots Alliance Inc.’s debt to assets ratio deteriorated from 2017 to 2018 and from 2018 to 2019.
Financial leverage ratio A solvency ratio calculated as total assets divided by total shareholders’ equity. Walgreens Boots Alliance Inc.’s financial leverage ratio increased from 2017 to 2018 and from 2018 to 2019.
Solvency ratio Description The company
Interest coverage ratio A solvency ratio calculated as EBIT divided by interest payments. Walgreens Boots Alliance Inc.’s interest coverage ratio improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019.
Fixed charge coverage ratio A solvency ratio calculated as earnings before fixed charges and tax divided by fixed charges. Walgreens Boots Alliance Inc.’s fixed charge coverage ratio improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019.

Debt to Equity

Walgreens Boots Alliance Inc., debt to equity calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Aug 31, 2019 Aug 31, 2018 Aug 31, 2017 Aug 31, 2016 Aug 31, 2015 Aug 31, 2014
Selected Financial Data (US$ in millions)
Short-term debt 5,738  1,966  251  323  1,068  774 
Long-term debt 11,098  12,431  12,684  18,705  13,315  3,736 
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
Benchmarks
Debt to Equity, Competitors2
CVS Health Corp. 1.07 1.26 0.72 0.75 0.74 —
Debt to Equity, Sector
Food & Drug Retailers 0.98 1.04 0.61 0.70 0.61 —
Debt to Equity, Industry
Consumer Services 1.24 1.26 1.07 0.97 0.92 —

Based on: 10-K (filing date: 2019-10-28), 10-K (filing date: 2018-10-11), 10-K (filing date: 2017-10-25), 10-K (filing date: 2016-10-20), 10-K (filing date: 2015-10-28), 10-K (filing date: 2014-10-20).

1 2019 Calculation
Debt to equity = Total debt ÷ Total Walgreens Boots Alliance, Inc. shareholders’ equity
= 16,836 ÷ 23,512 = 0.72

2 Click competitor name to see calculations.

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

Debt to Capital

Walgreens Boots Alliance Inc., debt to capital calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Aug 31, 2019 Aug 31, 2018 Aug 31, 2017 Aug 31, 2016 Aug 31, 2015 Aug 31, 2014
Selected Financial Data (US$ in millions)
Short-term debt 5,738  1,966  251  323  1,068  774 
Long-term debt 11,098  12,431  12,684  18,705  13,315  3,736 
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 
Total capital 40,348  40,404  40,401  48,908  45,244  24,967 
Solvency Ratio
Debt to capital1 0.42 0.36 0.32 0.39 0.32 0.18
Benchmarks
Debt to Capital, Competitors2
CVS Health Corp. 0.52 0.56 0.42 0.43 0.42 —
Debt to Capital, Sector
Food & Drug Retailers 0.49 0.51 0.38 0.41 0.38 —
Debt to Capital, Industry
Consumer Services 0.55 0.56 0.52 0.49 0.48 —

Based on: 10-K (filing date: 2019-10-28), 10-K (filing date: 2018-10-11), 10-K (filing date: 2017-10-25), 10-K (filing date: 2016-10-20), 10-K (filing date: 2015-10-28), 10-K (filing date: 2014-10-20).

1 2019 Calculation
Debt to capital = Total debt ÷ Total capital
= 16,836 ÷ 40,348 = 0.42

2 Click competitor name to see calculations.

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

Debt to Assets

Walgreens Boots Alliance Inc., debt to assets calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Aug 31, 2019 Aug 31, 2018 Aug 31, 2017 Aug 31, 2016 Aug 31, 2015 Aug 31, 2014
Selected Financial Data (US$ in millions)
Short-term debt 5,738  1,966  251  323  1,068  774 
Long-term debt 11,098  12,431  12,684  18,705  13,315  3,736 
Total debt 16,836  14,397  12,935  19,028  14,383  4,510 
 
Total assets 67,598  68,124  66,009  72,688  68,782  37,182 
Solvency Ratio
Debt to assets1 0.25 0.21 0.20 0.26 0.21 0.12
Benchmarks
Debt to Assets, Competitors2
CVS Health Corp. 0.31 0.37 0.28 0.29 0.29 —
Debt to Assets, Sector
Food & Drug Retailers 0.29 0.33 0.25 0.28 0.26 —
Debt to Assets, Industry
Consumer Services 0.34 0.36 0.34 0.32 0.31 —

Based on: 10-K (filing date: 2019-10-28), 10-K (filing date: 2018-10-11), 10-K (filing date: 2017-10-25), 10-K (filing date: 2016-10-20), 10-K (filing date: 2015-10-28), 10-K (filing date: 2014-10-20).

1 2019 Calculation
Debt to assets = Total debt ÷ Total assets
= 16,836 ÷ 67,598 = 0.25

2 Click competitor name to see calculations.

Solvency ratio Description The company
Debt to assets ratio A solvency ratio calculated as total debt divided by total assets. Walgreens Boots Alliance Inc.’s debt to assets ratio deteriorated from 2017 to 2018 and from 2018 to 2019.

Financial Leverage

Walgreens Boots Alliance Inc., financial leverage calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Aug 31, 2019 Aug 31, 2018 Aug 31, 2017 Aug 31, 2016 Aug 31, 2015 Aug 31, 2014
Selected Financial Data (US$ in millions)
Total assets 67,598  68,124  66,009  72,688  68,782  37,182 
Total Walgreens Boots Alliance, Inc. shareholders’ equity 23,512  26,007  27,466  29,880  30,861  20,457 
Solvency Ratio
Financial leverage1 2.88 2.62 2.40 2.43 2.23 1.82
Benchmarks
Financial Leverage, Competitors2
CVS Health Corp. 3.48 3.37 2.52 2.56 2.52 —
Financial Leverage, Sector
Food & Drug Retailers 3.32 3.14 2.47 2.51 2.39 —
Financial Leverage, Industry
Consumer Services 3.64 3.49 3.18 3.07 2.95 —

Based on: 10-K (filing date: 2019-10-28), 10-K (filing date: 2018-10-11), 10-K (filing date: 2017-10-25), 10-K (filing date: 2016-10-20), 10-K (filing date: 2015-10-28), 10-K (filing date: 2014-10-20).

1 2019 Calculation
Financial leverage = Total assets ÷ Total Walgreens Boots Alliance, Inc. shareholders’ equity
= 67,598 ÷ 23,512 = 2.88

2 Click competitor name to see calculations.

Solvency ratio Description The company
Financial leverage ratio A solvency ratio calculated as total assets divided by total shareholders’ equity. Walgreens Boots Alliance Inc.’s financial leverage ratio increased from 2017 to 2018 and from 2018 to 2019.

Interest Coverage

Walgreens Boots Alliance Inc., interest coverage calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Aug 31, 2019 Aug 31, 2018 Aug 31, 2017 Aug 31, 2016 Aug 31, 2015 Aug 31, 2014
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 
Add: Net income attributable to noncontrolling interest (20) 7  23  18  59  99 
Add: Income tax expense 588  998  760  997  1,056  1,526 
Add: Interest expense, net 704  616  693  596  605  156 
Earnings before interest and tax (EBIT) 5,254  6,645  5,554  5,784  5,940  3,713 
Solvency Ratio
Interest coverage1 7.46 10.79 8.01 9.70 9.82 23.80
Benchmarks
Interest Coverage, Competitors2
CVS Health Corp. 3.96 1.54 8.79 9.01 11.03 —
Interest Coverage, Sector
Food & Drug Retailers 4.62 3.30 8.48 9.26 10.53 —
Interest Coverage, Industry
Consumer Services 6.58 7.08 8.23 8.82 9.76 —

Based on: 10-K (filing date: 2019-10-28), 10-K (filing date: 2018-10-11), 10-K (filing date: 2017-10-25), 10-K (filing date: 2016-10-20), 10-K (filing date: 2015-10-28), 10-K (filing date: 2014-10-20).

1 2019 Calculation
Interest coverage = EBIT ÷ Interest expense
= 5,254 ÷ 704 = 7.46

2 Click competitor name to see calculations.

Solvency ratio Description The company
Interest coverage ratio A solvency ratio calculated as EBIT divided by interest payments. Walgreens Boots Alliance Inc.’s interest coverage ratio improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019.

Fixed Charge Coverage

Walgreens Boots Alliance Inc., fixed charge coverage calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Aug 31, 2019 Aug 31, 2018 Aug 31, 2017 Aug 31, 2016 Aug 31, 2015 Aug 31, 2014
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 
Add: Net income attributable to noncontrolling interest (20) 7  23  18  59  99 
Add: Income tax expense 588  998  760  997  1,056  1,526 
Add: Interest expense, net 704  616  693  596  605  156 
Earnings before interest and tax (EBIT) 5,254  6,645  5,554  5,784  5,940  3,713 
Add: Rental expense 3,622  3,447  3,259  3,355  3,176  2,687 
Earnings before fixed charges and tax 8,876  10,092  8,813  9,139  9,116  6,400 
 
Interest expense, net 704  616  693  596  605  156 
Rental expense 3,622  3,447  3,259  3,355  3,176  2,687 
Fixed charges 4,326  4,063  3,952  3,951  3,781  2,843 
Solvency Ratio
Fixed charge coverage1 2.05 2.48 2.23 2.31 2.41 2.25
Benchmarks
Fixed Charge Coverage, Competitors2
CVS Health Corp. 2.56 1.27 3.35 3.47 3.71 —
Fixed Charge Coverage, Sector
Food & Drug Retailers 2.34 1.81 2.76 2.86 3.01 —
Fixed Charge Coverage, Industry
Consumer Services 3.74 3.91 4.35 4.52 4.69 —

Based on: 10-K (filing date: 2019-10-28), 10-K (filing date: 2018-10-11), 10-K (filing date: 2017-10-25), 10-K (filing date: 2016-10-20), 10-K (filing date: 2015-10-28), 10-K (filing date: 2014-10-20).

1 2019 Calculation
Fixed charge coverage = Earnings before fixed charges and tax ÷ Fixed charges
= 8,876 ÷ 4,326 = 2.05

2 Click competitor name to see calculations.

Solvency ratio Description The company
Fixed charge coverage ratio A solvency ratio calculated as earnings before fixed charges and tax divided by fixed charges. Walgreens Boots Alliance Inc.’s fixed charge coverage ratio improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019.