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.

Adjustments to Financial Statements for Operating Leases
Adjusted Financial Ratios for Operating Leases (Summary)
Adjusted Total Asset Turnover
Adjusted Debt to Equity
Adjusted Return on Assets (ROA)

AutoZone Inc., adjustments to financial statements

US$ in thousands

	Aug 26, 2023	Aug 27, 2022	Aug 28, 2021	Aug 29, 2020	Aug 31, 2019	Aug 25, 2018
Adjustment to Total Assets
Total assets (as reported)	15,985,878)	15,275,043)	14,516,199)	14,423,872)	9,895,913)	9,346,980)
Add: Operating lease right-of-use asset (before adoption of FASB Topic 842)¹	—)	—)	—)	—)	2,131,812)	1,852,615)
Total assets (adjusted)	15,985,878)	15,275,043)	14,516,199)	14,423,872)	12,027,725)	11,199,595)
Adjustment to Total Debt
Total debt (as reported)	7,956,167)	6,432,397)	5,545,874)	5,736,724)	5,386,249)	5,160,233)
Add: Operating lease liability (before adoption of FASB Topic 842)²	—)	—)	—)	—)	2,131,812)	1,852,615)
Add: Current portion of operating lease liabilities	257,256)	243,407)	236,568)	223,846)	—)	—)
Add: Operating lease liabilities, less current portion	2,917,046)	2,837,973)	2,632,842)	2,501,560)	—)	—)
Total debt (adjusted)	11,130,469)	9,513,777)	8,415,284)	8,462,130)	7,518,061)	7,012,848)

Based on: 10-K (reporting date: 2023-08-26), 10-K (reporting date: 2022-08-27), 10-K (reporting date: 2021-08-28), 10-K (reporting date: 2020-08-29), 10-K (reporting date: 2019-08-31), 10-K (reporting date: 2018-08-25).

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

AutoZone Inc., Financial Data: Reported vs. Adjusted

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AutoZone Inc., adjusted financial ratios

	Aug 26, 2023	Aug 27, 2022	Aug 28, 2021	Aug 29, 2020	Aug 31, 2019	Aug 25, 2018
Total Asset Turnover¹
Reported total asset turnover	1.09	1.06	1.01	0.88	1.20	1.20
Adjusted total asset turnover	1.09	1.06	1.01	0.88	0.99	1.00
Debt to Equity²
Reported debt to equity	—	—	—	—	—	—
Adjusted debt to equity	—	—	—	—	—	—
Return on Assets³ (ROA)
Reported ROA	15.82%	15.91%	14.95%	12.01%	16.34%	14.31%
Adjusted ROA	15.82%	15.91%	14.95%	12.01%	13.45%	11.94%

Based on: 10-K (reporting date: 2023-08-26), 10-K (reporting date: 2022-08-27), 10-K (reporting date: 2021-08-28), 10-K (reporting date: 2020-08-29), 10-K (reporting date: 2019-08-31), 10-K (reporting date: 2018-08-25).

¹ See details »

² See details »

³ See details »

Financial ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	AutoZone Inc. adjusted total asset turnover ratio improved from 2021 to 2022 and from 2022 to 2023.
Adjusted ROA	A profitability ratio calculated as net income divided by adjusted total assets.	AutoZone Inc. adjusted ROA improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023.

AutoZone Inc., Financial Ratios: Reported vs. Adjusted

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	Aug 26, 2023	Aug 27, 2022	Aug 28, 2021	Aug 29, 2020	Aug 31, 2019	Aug 25, 2018
As Reported
Selected Financial Data (US$ in thousands)
Net sales	17,457,209)	16,252,230)	14,629,585)	12,631,967)	11,863,743)	11,221,077)
Total assets	15,985,878)	15,275,043)	14,516,199)	14,423,872)	9,895,913)	9,346,980)
Activity Ratio
Total asset turnover¹	1.09	1.06	1.01	0.88	1.20	1.20
Adjusted for Operating Leases
Selected Financial Data (US$ in thousands)
Net sales	17,457,209)	16,252,230)	14,629,585)	12,631,967)	11,863,743)	11,221,077)
Adjusted total assets	15,985,878)	15,275,043)	14,516,199)	14,423,872)	12,027,725)	11,199,595)
Activity Ratio
Adjusted total asset turnover²	1.09	1.06	1.01	0.88	0.99	1.00

Based on: 10-K (reporting date: 2023-08-26), 10-K (reporting date: 2022-08-27), 10-K (reporting date: 2021-08-28), 10-K (reporting date: 2020-08-29), 10-K (reporting date: 2019-08-31), 10-K (reporting date: 2018-08-25).

2023 Calculations

¹ Total asset turnover = Net sales ÷ Total assets
= 17,457,209 ÷ 15,985,878 = 1.09

² Adjusted total asset turnover = Net sales ÷ Adjusted total assets
= 17,457,209 ÷ 15,985,878 = 1.09

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Activity ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	AutoZone Inc. adjusted total asset turnover ratio improved from 2021 to 2022 and from 2022 to 2023.

	Aug 26, 2023	Aug 27, 2022	Aug 28, 2021	Aug 29, 2020	Aug 31, 2019	Aug 25, 2018
As Reported
Selected Financial Data (US$ in thousands)
Total debt	7,956,167)	6,432,397)	5,545,874)	5,736,724)	5,386,249)	5,160,233)
Stockholders’ deficit	(4,349,894)	(3,538,913)	(1,797,536)	(877,977)	(1,713,851)	(1,520,355)
Solvency Ratio
Debt to equity¹	—	—	—	—	—	—
Adjusted for Operating Leases
Selected Financial Data (US$ in thousands)
Adjusted total debt	11,130,469)	9,513,777)	8,415,284)	8,462,130)	7,518,061)	7,012,848)
Stockholders’ deficit	(4,349,894)	(3,538,913)	(1,797,536)	(877,977)	(1,713,851)	(1,520,355)
Solvency Ratio
Adjusted debt to equity²	—	—	—	—	—	—

Based on: 10-K (reporting date: 2023-08-26), 10-K (reporting date: 2022-08-27), 10-K (reporting date: 2021-08-28), 10-K (reporting date: 2020-08-29), 10-K (reporting date: 2019-08-31), 10-K (reporting date: 2018-08-25).

2023 Calculations

¹ Debt to equity = Total debt ÷ Stockholders’ deficit
= 7,956,167 ÷ -4,349,894 = —

² Adjusted debt to equity = Adjusted total debt ÷ Stockholders’ deficit
= 11,130,469 ÷ -4,349,894 = —

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	Aug 26, 2023	Aug 27, 2022	Aug 28, 2021	Aug 29, 2020	Aug 31, 2019	Aug 25, 2018
As Reported
Selected Financial Data (US$ in thousands)
Net income	2,528,426)	2,429,604)	2,170,314)	1,732,972)	1,617,221)	1,337,536)
Total assets	15,985,878)	15,275,043)	14,516,199)	14,423,872)	9,895,913)	9,346,980)
Profitability Ratio
ROA¹	15.82%	15.91%	14.95%	12.01%	16.34%	14.31%
Adjusted for Operating Leases
Selected Financial Data (US$ in thousands)
Net income	2,528,426)	2,429,604)	2,170,314)	1,732,972)	1,617,221)	1,337,536)
Adjusted total assets	15,985,878)	15,275,043)	14,516,199)	14,423,872)	12,027,725)	11,199,595)
Profitability Ratio
Adjusted ROA²	15.82%	15.91%	14.95%	12.01%	13.45%	11.94%

Based on: 10-K (reporting date: 2023-08-26), 10-K (reporting date: 2022-08-27), 10-K (reporting date: 2021-08-28), 10-K (reporting date: 2020-08-29), 10-K (reporting date: 2019-08-31), 10-K (reporting date: 2018-08-25).

2023 Calculations

¹ ROA = 100 × Net income ÷ Total assets
= 100 × 2,528,426 ÷ 15,985,878 = 15.82%

² Adjusted ROA = 100 × Net income ÷ Adjusted total assets
= 100 × 2,528,426 ÷ 15,985,878 = 15.82%

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Profitability ratio	Description	The company
Adjusted ROA	A profitability ratio calculated as net income divided by adjusted total assets.	AutoZone Inc. adjusted ROA improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023.

AutoZone Inc. (NYSE:AZO)

Analysis of Operating Leases

Adjustments to Financial Statements for Operating Leases

AutoZone Inc., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios for Operating Leases (Summary)

AutoZone Inc., Financial Ratios: Reported vs. Adjusted

Adjusted Total Asset Turnover

Adjusted Debt to Equity

Adjusted Return on Assets (ROA)