Microsoft Excel LibreOffice Calc

Walgreens Boots Alliance Inc. (WBA)


Analysis of Solvency Ratios

Difficulty: Beginner

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, 2018 Aug 31, 2017 Aug 31, 2016 Aug 31, 2015 Aug 31, 2014 Aug 31, 2013
Debt Ratios
Debt to equity 0.55 0.47 0.64 0.47 0.22 0.26
Debt to capital 0.36 0.32 0.39 0.32 0.18 0.21
Debt to assets 0.21 0.20 0.26 0.21 0.12 0.14
Financial leverage 2.62 2.40 2.43 2.23 1.82 1.82
Coverage Ratios
Interest coverage 10.79 8.01 9.70 9.82 23.80 24.61
Fixed charge coverage 2.48 2.23 2.31 2.41 2.25 2.39

Based on: 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), 10-K (filing date: 2013-10-21).

Solvency ratio Description The company
Debt to equity ratio A solvency ratio calculated as total debt divided by total shareholders’ equity.
Debt to capital ratio A solvency ratio calculated as total debt divided by total debt plus shareholders’ equity.
Debt to assets ratio A solvency ratio calculated as total debt divided by total assets.
Financial leverage ratio A solvency ratio calculated as total assets divided by total shareholders’ equity. Walgreens Boots Alliance Inc.’s financial leverage ratio declined from 2016 to 2017 but then increased from 2017 to 2018 exceeding 2016 level.

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 deteriorated from 2016 to 2017 but then improved from 2017 to 2018 exceeding 2016 level.
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 deteriorated from 2016 to 2017 but then improved from 2017 to 2018 exceeding 2016 level.

Debt to Equity

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

Microsoft Excel LibreOffice Calc
Aug 31, 2018 Aug 31, 2017 Aug 31, 2016 Aug 31, 2015 Aug 31, 2014 Aug 31, 2013
Selected Financial Data (US$ in millions)
Short-term debt 1,966  251  323  1,068  774  570 
Long-term debt 12,431  12,684  18,705  13,315  3,736  4,477 
Total debt 14,397  12,935  19,028  14,383  4,510  5,047 
 
Total Walgreens Boots Alliance, Inc. shareholders’ equity 26,007  27,466  29,880  30,861  20,457  19,454 
Solvency Ratio
Debt to equity1 0.55 0.47 0.64 0.47 0.22 0.26
Benchmarks
Debt to Equity, Competitors2
CVS Health Corp. 1.26 0.72 0.75 0.74 0.34
Debt to Equity, Sector
Food & Drug Retailers 1.04 0.61 0.70 0.61 0.30
Debt to Equity, Industry
Consumer Services 1.26 1.07 0.97 0.92 0.74

Based on: 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), 10-K (filing date: 2013-10-21).

1 2018 Calculation
Debt to equity = Total debt ÷ Total Walgreens Boots Alliance, Inc. shareholders’ equity
= 14,397 ÷ 26,007 = 0.55

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.

Debt to Capital

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

Microsoft Excel LibreOffice Calc
Aug 31, 2018 Aug 31, 2017 Aug 31, 2016 Aug 31, 2015 Aug 31, 2014 Aug 31, 2013
Selected Financial Data (US$ in millions)
Short-term debt 1,966  251  323  1,068  774  570 
Long-term debt 12,431  12,684  18,705  13,315  3,736  4,477 
Total debt 14,397  12,935  19,028  14,383  4,510  5,047 
Total Walgreens Boots Alliance, Inc. shareholders’ equity 26,007  27,466  29,880  30,861  20,457  19,454 
Total capital 40,404  40,401  48,908  45,244  24,967  24,501 
Solvency Ratio
Debt to capital1 0.36 0.32 0.39 0.32 0.18 0.21
Benchmarks
Debt to Capital, Competitors2
CVS Health Corp. 0.56 0.42 0.43 0.42 0.25
Debt to Capital, Sector
Food & Drug Retailers 0.51 0.38 0.41 0.38 0.23
Debt to Capital, Industry
Consumer Services 0.56 0.52 0.49 0.48 0.42

Based on: 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), 10-K (filing date: 2013-10-21).

1 2018 Calculation
Debt to capital = Total debt ÷ Total capital
= 14,397 ÷ 40,404 = 0.36

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.

Debt to Assets

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

Microsoft Excel LibreOffice Calc
Aug 31, 2018 Aug 31, 2017 Aug 31, 2016 Aug 31, 2015 Aug 31, 2014 Aug 31, 2013
Selected Financial Data (US$ in millions)
Short-term debt 1,966  251  323  1,068  774  570 
Long-term debt 12,431  12,684  18,705  13,315  3,736  4,477 
Total debt 14,397  12,935  19,028  14,383  4,510  5,047 
 
Total assets 68,124  66,009  72,688  68,782  37,182  35,481 
Solvency Ratio
Debt to assets1 0.21 0.20 0.26 0.21 0.12 0.14
Benchmarks
Debt to Assets, Competitors2
CVS Health Corp. 0.37 0.28 0.29 0.29 0.17
Debt to Assets, Sector
Food & Drug Retailers 0.33 0.25 0.28 0.26 0.16
Debt to Assets, Industry
Consumer Services 0.36 0.33 0.31 0.31 0.27

Based on: 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), 10-K (filing date: 2013-10-21).

1 2018 Calculation
Debt to assets = Total debt ÷ Total assets
= 14,397 ÷ 68,124 = 0.21

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.

Financial Leverage

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

Microsoft Excel LibreOffice Calc
Aug 31, 2018 Aug 31, 2017 Aug 31, 2016 Aug 31, 2015 Aug 31, 2014 Aug 31, 2013
Selected Financial Data (US$ in millions)
Total assets 68,124  66,009  72,688  68,782  37,182  35,481 
Total Walgreens Boots Alliance, Inc. shareholders’ equity 26,007  27,466  29,880  30,861  20,457  19,454 
Solvency Ratio
Financial leverage1 2.62 2.40 2.43 2.23 1.82 1.82
Benchmarks
Financial Leverage, Competitors2
CVS Health Corp. 3.37 2.52 2.56 2.52 1.96
Financial Leverage, Sector
Food & Drug Retailers 3.14 2.47 2.51 2.39 1.91
Financial Leverage, Industry
Consumer Services 3.52 3.21 3.09 3.01 2.74

Based on: 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), 10-K (filing date: 2013-10-21).

1 2018 Calculation
Financial leverage = Total assets ÷ Total Walgreens Boots Alliance, Inc. shareholders’ equity
= 68,124 ÷ 26,007 = 2.62

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 declined from 2016 to 2017 but then increased from 2017 to 2018 exceeding 2016 level.

Interest Coverage

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

Microsoft Excel LibreOffice Calc
Aug 31, 2018 Aug 31, 2017 Aug 31, 2016 Aug 31, 2015 Aug 31, 2014 Aug 31, 2013
Selected Financial Data (US$ in millions)
Net earnings attributable to Walgreens Boots Alliance, Inc. 5,024  4,078  4,173  4,220  1,932  2,450 
Add: Net income attributable to noncontrolling interest 23  18  59  99  — 
Add: Income tax expense 998  760  997  1,056  1,526  1,445 
Add: Interest expense, net 616  693  596  605  156  165 
Earnings before interest and tax (EBIT) 6,645  5,554  5,784  5,940  3,713  4,060 
Solvency Ratio
Interest coverage1 10.79 8.01 9.70 9.82 23.80 24.61
Benchmarks
Interest Coverage, Competitors2
CVS Health Corp. 1.54 8.79 9.01 11.03 13.48
Interest Coverage, Sector
Food & Drug Retailers 3.30 8.48 9.26 10.53 15.57
Interest Coverage, Industry
Consumer Services 7.28 8.41 9.20 10.09 10.04

Based on: 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), 10-K (filing date: 2013-10-21).

1 2018 Calculation
Interest coverage = EBIT ÷ Interest expense
= 6,645 ÷ 616 = 10.79

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 deteriorated from 2016 to 2017 but then improved from 2017 to 2018 exceeding 2016 level.

Fixed Charge Coverage

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

Microsoft Excel LibreOffice Calc
Aug 31, 2018 Aug 31, 2017 Aug 31, 2016 Aug 31, 2015 Aug 31, 2014 Aug 31, 2013
Selected Financial Data (US$ in millions)
Net earnings attributable to Walgreens Boots Alliance, Inc. 5,024  4,078  4,173  4,220  1,932  2,450 
Add: Net income attributable to noncontrolling interest 23  18  59  99  — 
Add: Income tax expense 998  760  997  1,056  1,526  1,445 
Add: Interest expense, net 616  693  596  605  156  165 
Earnings before interest and tax (EBIT) 6,645  5,554  5,784  5,940  3,713  4,060 
Add: Rental expense 3,447  3,259  3,355  3,176  2,687  2,644 
Earnings before fixed charges and tax 10,092  8,813  9,139  9,116  6,400  6,704 
 
Interest expense, net 616  693  596  605  156  165 
Rental expense 3,447  3,259  3,355  3,176  2,687  2,644 
Fixed charges 4,063  3,952  3,951  3,781  2,843  2,809 
Solvency Ratio
Fixed charge coverage1 2.48 2.23 2.31 2.41 2.25 2.39
Benchmarks
Fixed Charge Coverage, Competitors2
CVS Health Corp. 1.27 3.35 3.47 3.71 3.62
Fixed Charge Coverage, Sector
Food & Drug Retailers 1.81 2.76 2.86 3.01 2.94
Fixed Charge Coverage, Industry
Consumer Services 3.98 4.37 4.61 4.77 4.56

Based on: 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), 10-K (filing date: 2013-10-21).

1 2018 Calculation
Fixed charge coverage = Earnings before fixed charges and tax ÷ Fixed charges
= 10,092 ÷ 4,063 = 2.48

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 deteriorated from 2016 to 2017 but then improved from 2017 to 2018 exceeding 2016 level.