Name: Western Digital Corp. (NASDAQ:WDC) | Liabilities and Stockholders’ Equity
Creator: Stock Analysis on Net

Balance Sheet: Liabilities and Stockholders’ Equity

The balance sheet provides creditors, investors, and analysts with information on company resources (assets) and its sources of capital (its equity and liabilities). It normally also provides information about the future earnings capacity of a company assets as well as an indication of cash flows that may come from receivables and inventories.

Liabilities represents obligations of a company arising from past events, the settlement of which is expected to result in an outflow of economic benefits from the entity.

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Western Digital Corp., consolidated balance sheet: liabilities and stockholders’ equity

US$ in millions

	Jun 30, 2023	Jul 1, 2022	Jul 2, 2021	Jul 3, 2020	Jun 28, 2019	Jun 29, 2018
Accounts payable	1,293)	1,902)	1,934)	1,945)	1,567)	2,265)
Accounts payable to related parties	292)	320)	398)	407)	331)	259)
Accrued expenses	1,288)	1,636)	1,390)	1,296)	1,296)	1,274)
Income taxes payable	999)	869)	263)	—)	—)	—)
Accrued compensation	349)	510)	634)	472)	347)	479)
Current portion of long-term debt	1,213)	—)	251)	286)	276)	179)
Current liabilities	5,434)	5,237)	4,870)	4,406)	3,817)	4,456)
Long-term debt, less current portion	5,857)	7,022)	8,474)	9,289)	10,246)	10,993)
Non-current net tax payable	464)	659)	684)	815)	928)	1,315)
Non-current portion of unrecognized tax benefits	408)	477)	750)	720)	699)	508)
Other non-current liabilities	543)	643)	633)	881)	713)	432)
Other liabilities	1,415)	1,779)	2,067)	2,416)	2,340)	2,255)
Non-current liabilities	7,272)	8,801)	10,541)	11,705)	12,586)	13,248)
Total liabilities	12,706)	14,038)	15,411)	16,111)	16,403)	17,704)
Convertible preferred stock, $0.01 par value	876)	—)	—)	—)	—)	—)
Common stock, $0.01 par value	3)	3)	3)	3)	3)	3)
Additional paid-in capital	3,936)	3,733)	3,608)	3,717)	3,851)	4,254)
Accumulated other comprehensive loss	(516)	(554)	(197)	(157)	(68)	(39)
Retained earnings	7,424)	9,039)	7,539)	6,725)	7,449)	8,757)
Treasury stock, common shares at cost	—)	—)	(232)	(737)	(1,268)	(1,444)
Shareholders’ equity	11,723)	12,221)	10,721)	9,551)	9,967)	11,531)
Total liabilities and shareholders’ equity	24,429)	26,259)	26,132)	25,662)	26,370)	29,235)

Based on: 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-07-01), 10-K (reporting date: 2021-07-02), 10-K (reporting date: 2020-07-03), 10-K (reporting date: 2019-06-28), 10-K (reporting date: 2018-06-29).

An analysis of the balance sheet from June 2018 to June 2023 reveals a consistent reduction in total liabilities alongside a relatively stable equity position, resulting in a gradual contraction of the total balance sheet from 29.2 billion USD to 24.4 billion USD.

Current Liabilities and Short-Term Obligations: Current liabilities have exhibited an overall upward trend, increasing from 4.46 billion USD in 2018 to 5.43 billion USD in 2023. This growth is primarily driven by a significant rise in income taxes payable, which were not reported in 2018 but reached 999 million USD by 2023. Additionally, the current portion of long-term debt experienced a sharp increase in the final year, jumping to 1.21 billion USD in 2023 from zero reported in 2022, indicating imminent debt maturities. Conversely, accounts payable have declined substantially over the period, falling from 2.27 billion USD to 1.29 billion USD.
Long-Term Debt and Non-Current Liabilities: A strong deleveraging trend is evident in non-current liabilities, which decreased from 13.25 billion USD in 2018 to 7.27 billion USD in 2023. The primary driver of this decline is the long-term debt, less current portion, which was reduced from 11.0 billion USD to 5.86 billion USD. Non-current net tax payables also showed a steady decline, falling from 1.32 billion USD in 2018 to 464 million USD in 2023, suggesting a systematic settlement of long-term tax obligations.
Stockholders' Equity and Capital Structure: Shareholders' equity remained comparatively stable, ending the period at 11.72 billion USD, up slightly from 11.53 billion USD in 2018. Retained earnings fluctuated throughout the period, peaking at 9.04 billion USD in 2022 before declining to 7.42 billion USD in 2023. A notable shift in capital structure occurred in 2023 with the introduction of 876 million USD in convertible preferred stock. Furthermore, the treasury stock balance, which stood at 1.44 billion USD in 2018, was gradually reduced and reached zero by 2022.

The financial trajectory indicates a strategic shift toward reducing long-term debt, although this is partially offset by an increase in current liabilities and short-term debt obligations. The stability of shareholders' equity, paired with the reduction in total liabilities, suggests an improvement in the overall solvency profile, despite the recent increase in current tax and debt maturities.

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