Walgreens Boots Alliance Inc. (NASDAQ:WBA)

The financial leverage ratio exhibits a general upward trend from late 2013 to mid-2020, increasing from 1.82 to 4.17. This indicates a growing use of debt financing relative to equity over the periods analyzed. The ratio sees particularly notable increases starting from early 2019 and accelerating through the first half of 2020.

Both debt-to-equity and debt-to-capital ratios show rising patterns, with fluctuations but an overall increase from around 0.2–0.25 in 2013 to approximately 0.8 and 0.44 respectively in mid-2020. When including operating lease liabilities, these ratios show even more significant increases, especially the debt-to-equity including operating leases, which jumps sharply in early 2020, reaching nearly 2.0 by May 2020. Debt-to-capital including operating lease liabilities follows a similar trend, increasing markedly from 0.42 in late 2019 to about 0.66 in mid-2020.

Debt-to-assets ratios without considering operating lease liabilities remain relatively stable, showing minor variation generally between 0.12 and 0.26 over the entire period, then declining slightly in early 2020. However, when operating lease liabilities are included, the debt-to-assets ratio rises substantially after late 2019, nearly doubling from roughly 0.25 to 0.47 in mid-2020, illustrating the increasing impact of lease obligations on the company's leverage profile.

Interest coverage ratios illustrate a declining trend over time, especially evident from mid-2014 when values around 23.8 begin to decrease steadily, dropping below 10 by early 2016 and further weakening to as low as 2.42 by May 2020. This suggests the company’s ability to cover interest expenses from operating earnings has diminished considerably, pointing to increased financial risk or lower operational profitability relative to debt costs.

Leverage Trends

Overall, leverage measures reveal increasing dependency on debt with notable influence from operating lease liabilities starting around late 2019 to 2020.

Debt to Equity and Capital

Steady growth is observed, with sharper increases including operating lease obligations, highlighting a reassessment or increased recognition of lease liabilities in the capital structure.

Debt to Assets

Relatively stable initially but shows a sharp increase when operating leases are factored in during 2020, indicating growing liabilities affecting asset coverage ratios.

Interest Coverage

Marked decline over the periods suggests decreasing earnings buffer relative to interest expense, signaling potential stress in servicing debt.

The financial data reveals several notable trends concerning the company's capital structure over the observed periods.

Total Debt

Total debt exhibited a fluctuating pattern. Initially, from November 2013 through August 2014, total debt remained relatively stable, hovering around 4,500 to 5,000 million USD. A significant spike occurred starting November 2014, with total debt peaking near 19,000 million USD by August 2016. This elevated level was followed by a decline, reaching approximately 13,000 million USD by August 2017. Subsequently, total debt increased again, displaying fluctuations but generally remaining between 15,000 and 18,000 million USD. By May 2020, total debt declined slightly to about 16,490 million USD. These changes suggest strategic decisions impacting leverage, such as potential acquisitions, refinancing, or debt repayment activities during this period.

Total Shareholders’ Equity

Shareholders' equity showed an initial steady growth from approximately 20,000 million USD in late 2013 to over 30,000 million USD by early 2015. After this peak, equity values dipped and fluctuated around 25,000 to 30,000 million USD for several years, demonstrating some volatility. The equity showed a declining trend overall starting from late 2016, moving below 25,000 million USD by late 2019, and further to approximately 20,700 million USD by May 2020. This decrease could indicate share repurchases, dividend payments, losses, or asset impairments affecting the net equity base.

Debt to Equity Ratio

The debt to equity ratio experienced significant variations reflecting changes in both debt and equity. Initially low, around 0.21 to 0.25, the ratio escalated sharply in late 2014 to early 2015, peaking near 0.7 in November 2014, indicating a notable increase in leverage relative to equity. This elevated leverage persisted with some oscillations, maintaining values generally between 0.47 and 0.73 over the following years. In the final reported periods, the ratio reached its highest level at 0.8 by May 2020. This upward trend in financial leverage points to increased reliance on debt financing relative to equity, which may elevate financial risk and affect cost of capital considerations.

In summary, the company displayed a pattern of increasing debt levels, particularly from late 2014 to 2016, accompanied by a peak and subsequent decline in shareholders’ equity. The leverage ratio’s rising trend signifies a shift towards higher debt dependency, warranting attention to debt management strategies and their impact on financial stability during these years.

The financial data reveals notable shifts in the company's capital structure over the analyzed quarters. Total debt, inclusive of operating lease liabilities, fluctuated significantly, illustrating periods of substantial increase followed by relative stabilization. Starting from approximately $5 billion, the debt level surged to over $14 billion by late 2014, marking a sharp rise that persisted through mid-2015. Subsequently, debt remained elevated with minor variations until a pronounced spike occurred beginning in early 2020, where debt more than doubled, reaching above $40 billion by May 2020.

In parallel, shareholders’ equity demonstrated a generally increasing trend until early 2017, peaking near $31.5 billion. After this point, equity exhibited a gradual decline with moderate fluctuations, falling to around $23.7 billion by May 2020. This reduction in equity contrasts with earlier steady growth and suggests adjustments in capital, potentially related to dividends, losses, or share repurchases during the later periods.

The debt-to-equity ratio, incorporating operating lease liabilities, reflects the above trends distinctly. Initially low, ranging from 0.21 to 0.25, the ratio sharply increased in late 2014 to approximately 0.7, indicating a substantial rise in leverage relative to equity. This elevated leverage persisted through 2016, followed by a modest decline and stabilization around 0.5 to 0.6 between 2017 and early 2019. However, from early 2019 onward, the ratio rose markedly once again, reaching levels near or above 1.7 by early 2020, suggesting a significant increase in leverage and potential financial risk.

Overall, the data indicates a strategic evolution in financing approach, characterized by increased debt levels and higher leverage ratios in recent periods. The considerable growth in debt relative to equity toward 2020 warrants attention regarding the company's ability to manage its obligations and maintain financial stability under elevated indebtedness.

Total Debt (including operating lease liability)

Exhibited significant growth from mid-2014 onwards, with a major surge in early 2020 leading to levels exceeding $40 billion.

Shareholders’ Equity

Rose steadily to a peak near $31.5 billion around early 2017, followed by gradual decline, dropping to roughly $23.7 billion by mid-2020.

Debt-to-Equity Ratio

Transitioned from a low leverage state (approx. 0.2) pre-2014 to elevated levels above 0.7 in 2014-2016, stabilized around mid-0.5 range in 2017-2019, then sharply increased to near 2.0 by 2020, indicating rising financial leverage and exposure.

Total debt

The total debt exhibits significant fluctuations over the observed periods. Initially, it remains relatively stable and low from November 2013 through August 2014, around the 4,500 to 5,000 million US dollar range. A sharp increase occurs starting in November 2014, peaking close to 19,000 million US dollars in August 2016. After this peak, the debt declines notably until November 2017, falling back near 13,000 million US dollars. Subsequently, from February 2018 onward, total debt rises again, reaching levels above 18,000 million US dollars by February 2019, before tapering slightly and stabilizing around 16,000 to 16,500 million US dollars by mid-2020.

Total capital

Total capital shows a general upward trend in the first half of the timeline, increasing from roughly 25,000 million US dollars in late 2013 to about 49,000 million by August 2016. Following this high, a pronounced decline occurs, with capital dropping to approximately 40,000 million US dollars by the end of 2017. From early 2018 through mid-2020, total capital fluctuates mildly but generally trends downward, settling near 37,000 million US dollars by May 2020.

Debt to capital ratio

This ratio reflects the relationship between debt and total capital and varies considerably through the timeline. Initially low, around 0.17 to 0.2, it increases sharply in late 2014 to a range of approximately 0.32 to 0.41 through 2016, indicating a larger proportion of debt relative to total capital during this period. Although there is a brief decrease to around 0.32 in late 2017, the ratio rises again, exceeding 0.4 and reaching 0.44 by mid-2020. This upward trajectory suggests a progressively higher leverage over time, with debt constituting a growing share of total capital.

The quarterly financial data reveals notable trends in the company’s leverage and capital structure over the analyzed period.

Total Debt (including operating lease liability)

The total debt levels initially remain relatively stable from November 2013 through August 2014, with values around 4,500 to 5,000 million USD. Subsequently, there is a significant increase starting November 2014, peaking notably around February and May 2020 at above 40,000 million USD. This sharp rise in debt suggests a considerable increase in leverage or financing, which becomes markedly pronounced in the years 2019 and 2020.

Total Capital (including operating lease liability)

Total capital follows an upward trend overall, with some fluctuations. Beginning around 25,000 million USD in late 2013 to early 2014, it increases significantly by November 2014 and stabilizes around 40,000 to 49,000 million USD through 2015 to 2019. A peak is observed between 2019 and 2020, nearing 65,000 million USD, indicating an expansion in the company’s capital base. However, there is some decline post the peak, suggesting potential capital structure adjustments.

Debt to Capital Ratio (including operating lease liability)

The debt to capital ratio demonstrates a clear upward trajectory over the period. Initially, the ratio is modest, ranging from approximately 0.17 to 0.20 through the first three quarters. There is a sharp increase commencing in late 2014, where the ratio rises rapidly to around 0.39 by late 2016, reflecting higher leverage relative to capital. From 2017 to 2019, the ratio remains relatively stable between 0.32 and 0.42, indicating consistent leverage levels. However, in 2020, a pronounced spike occurs, with the ratio climbing sharply to above 0.60, reaching 0.66 by May 2020. This suggests a significant increase in reliance on debt financing relative to total capital during this period.

In summary, the company exhibits a pattern of increasing indebtedness and capital expansion over time, with particularly distinct growth in debt and leverage occurring in 2019 and early 2020. This could be indicative of strategic financing actions, acquisitions, or responses to external financial needs. The elevated debt to capital ratio in 2020 warrants attention regarding financial risk and cost of capital moving forward.

Total Debt

Over the period analyzed, total debt exhibited significant fluctuations. Initially, total debt remained fairly stable around the 5000 million US dollars mark through early 2014. However, starting in late 2014, there was a marked increase, peaking around 19,000 million US dollars by mid-2016, indicating a substantial rise in borrowing or financial obligations. Subsequently, total debt decreased to near 13,000 million US dollars by late 2017 but again fluctuated upward, reaching approximately 18,000 million US dollars by early 2019. In the latter periods toward mid-2020, total debt stabilized around 16,000 million US dollars, suggesting some deleveraging or stabilization efforts.

Total Assets

Total assets followed a generally upward trend with some volatility. Early values hovered in the mid-30,000 million US dollars range but increased significantly beginning late 2014, reaching above 70,000 million US dollars starting in early 2015. The highest asset values were observed around 2016 and early 2017, peaking near 74,000 million US dollars. A decline followed through 2017 into 2019, where total assets settled near 68,000 million US dollars. An exceptional increase was visible by early 2020, with assets nearing 91,000 million US dollars before a slight dip thereafter. This pattern suggests periods of asset growth possibly linked to acquisitions, revaluations, or capital investments.

Debt to Assets Ratio

The debt to assets ratio demonstrated considerable variability, reflecting changes in debt relative to asset growth. During 2013 and early 2014, this ratio remained low and stable between 0.12 and 0.14, indicating conservative leverage. From late 2014, it sharply increased to around 0.3, highlighting a shift toward higher leverage consistent with the rise in total debt. Between 2015 and 2017, the ratio fluctuated mostly between 0.21 and 0.26, aligning with high debt levels coupled with asset increases. Notably, the ratio dropped back to near 0.19 by early 2020, indicating a relative reduction in leverage possibly due to asset growth outpacing debt increases or active debt management. Overall, leverage trends suggest periods of aggressive borrowing balanced with intermittent efforts to control or reduce debt exposure.

Summary

Across the observed periods, the data reflects a cycle of strategic financial management characterized by an initial low-leverage stance, followed by a period of aggressive debt accumulation and asset expansion, and later phases of stabilization and deleveraging. The company expanded its asset base substantially post-2014, possibly through acquisitions or capital expenditures, while managing its debt levels variably to maintain a debt to assets ratio primarily between 0.2 and 0.26, except for the earlier and late periods where the ratio was lower. The final data points suggest a cautious deleveraging trend coinciding with a peak in asset value, indicating a possible focus on financial strengthening.

The financial data demonstrates noteworthy trends in the company's debt levels, asset base, and leverage ratios over multiple quarterly periods.

Total Debt (Including Operating Lease Liability)

The total debt exhibited a relative stability during the initial quarters from late 2013 to mid-2014, fluctuating slightly around the 4,500 to 5,100 million range. A significant increase is observed starting from late 2014, peaking around early 2015 with values exceeding 17,000 million. Following this peak, the debt levels generally remained elevated but showed fluctuations within the range of approximately 12,900 to 19,000 million up through late 2019. A sharp and considerable escalation is apparent beginning in early 2020, with debt surging dramatically to over 40,700 million by mid-2020. This uptrend indicates increased borrowing or lease liabilities during this period.

Total Assets

Total assets displayed a growth trend from late 2013 through mid-2015, increasing from approximately 36,500 million to over 70,000 million. This rise was somewhat maintained with minor fluctuations, peaking again near 74,000 million in mid-2017. However, from late 2017 onward, total assets show a gradual decline with some intermediate variations, falling below 70,000 million by late 2019. By mid-2020, a marked increase in total assets is noted, reaching approximately 90,000 million, which aligns with the period reflecting a surge in total debt.

Debt to Assets Ratio (Including Operating Lease Liability)

The leverage ratio remained relatively low and stable around 0.12 to 0.14 during 2013 through mid-2014. There was a notable increase in late 2014, where the ratio jumped to around 0.3, followed by a decline and stabilization near 0.2 to 0.26 over the 2015 to 2019 period. This indicates a moderately fluctuating but controlled leverage position during those years. In early 2020, the ratio sharply increased to nearly 0.47, reflecting heightened financial leverage concurrent with the rise in debt and total assets. This substantial increase suggests a heightened reliance on debt financing during that period.

Overall, the analysis reveals a pattern of capital structure changes, with stable leverage in early years, followed by increased borrowing and asset expansion mid-decade, then relative stability, and finally a significant increase in both assets and liabilities in 2020. The sudden rise in debt and assets in 2020 may point to strategic financial decisions or external factors impacting the balance sheet composition and risk profile.

The analysis of the financial data over the indicated periods reveals notable trends in the company's asset base, equity, and financial leverage ratios.

Total assets

The total assets exhibited an overall increasing trend from November 2013 through May 2020, albeit with fluctuations. Starting at approximately $36.5 billion in late 2013, there was a steady rise, reaching a peak of about $90.8 billion by the end of February 2020. However, intermittent periods showed declines, particularly noticeable between late 2017 and late 2019 when assets fluctuated moderately around the $66-70 billion range. Continuing into 2020, assets remained elevated but showed a slight decline from the February peak by May 2020.

Total shareholders’ equity

Shareholders’ equity demonstrated a less consistent pattern with periods of both growth and decline. Initially increasing from about $20 billion in late 2013 to exceed $30 billion by early 2015, equity then experienced a downward trend, particularly from late 2016 onwards. From a high near $30.6 billion in mid-2017, equity progressively decreased, reaching approximately $20.7 billion by May 2020. This decline suggests potential distribution of earnings, impairments, or other equity-reducing activities over time.

Financial leverage

The financial leverage ratio steadily increased throughout the period, rising from about 1.8 in late 2013 to above 4.0 by May 2020. This indicates an increasing reliance on debt or borrowings relative to equity. The ratio's growth was particularly pronounced from early 2019 forward, suggesting accelerated leverage expansion and thereby higher financial risk exposure.

In summary, while the total asset base expanded substantially through the observed intervals, shareholders’ equity did not keep pace, resulting in a consistent increase in financial leverage. This elevated leverage indicates growing dependence on external financing compared to equity, which may have implications for the company's risk profile and financial stability going forward.

The earnings before interest and tax (EBIT) exhibit a fluctuating trend over the analyzed quarters. Initially, EBIT values show moderate fluctuations around the range of approximately 1100 to 1300 million US dollars. Notably, there are sharp declines in EBIT in the quarters ending August 2014 and August 2015, with values dropping significantly below earlier levels. Subsequent quarters demonstrate some recovery and variability, reaching peaks notably around February 2015 and February 2018. However, a marked downturn occurs in the last reported period, ending May 2020, where EBIT turns negative, indicating an operational loss before interest and taxes.

Interest expense, net, shows an overall increasing trend from the beginning through mid-series; starting at low 40s millions US dollars, climbing steadily and peaking around the quarters ending August 2015 with values exceeding 250 million US dollars. From that point onward, interest expense stabilizes with moderate fluctuations, generally staying within the 140 to 190 million USD range. Toward the end of the data series, a slight decline is visible but does not return to the initial lower levels.

The interest coverage ratio, which measures the ability to cover interest expenses from EBIT, shows a general downward trend. Early in the series, this ratio is high, indicating strong coverage (values around or above 20). However, after the mid-2014 quarter, the ratio declines consistently, reflecting increasing difficulty in covering interest expenses from EBIT. Despite minor increases in coverage ratios in some quarters, the overall movement is downward, culminating in a low coverage ratio of 2.42 in the final period—signifying a significant compression in financial buffer against interest obligations.

EBIT Analysis

Highly variable with intermittent steep declines, including two significant drops around August 2014 and August 2015; peaks occur in early 2015 and early 2018; sharp deterioration by May 2020 with negative EBIT.

Interest Expense Trends

Rising trend from low levels in 2013 to a peak in mid-2015; becomes more stable afterward with moderate fluctuations; slight downward adjustments toward the end but remains materially higher than early data points.

Interest Coverage Ratio Movement

Decreases substantially from high levels indicative of safety in covering interest to markedly lower levels, reflecting increased financial strain; ends near 2.4, indicating reduced capacity to support interest payments from earnings.

Overall, these data suggest that the company faced operational challenges marked by volatility in EBIT performance and increasing interest expenses, resulting in the erosion of interest coverage capacity. The negative EBIT in the final quarter signals a significant operational setback, coupled with a weakened position to manage debt-related costs.