Name: AutoZone Inc. (NYSE:AZO) | 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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AutoZone Inc., consolidated balance sheet: liabilities and stockholders’ equity

US$ in thousands

	Aug 26, 2023	Aug 27, 2022	Aug 28, 2021	Aug 29, 2020	Aug 31, 2019	Aug 25, 2018
Accounts payable	7,201,281)	7,301,347)	6,013,924)	5,156,324)	4,864,912)	4,409,372)
Current portion of operating lease liabilities	257,256)	243,407)	236,568)	223,846)	—)	—)
Accrued compensation, related payroll taxes and benefits	343,379)	414,892)	470,561)	321,071)	170,321)	195,004)
Property, sales and other taxes	165,731)	153,305)	135,831)	121,196)	122,372)	106,050)
Medical and casualty insurance claims, current portion	127,624)	115,201)	121,237)	112,746)	89,250)	88,761)
Current portion of finance lease liabilities	86,916)	92,877)	89,932)	67,498)	56,246)	52,290)
Accrued gift cards	59,254)	52,237)	50,369)	43,876)	38,658)	27,401)
Accrued interest	54,493)	50,696)	55,435)	63,503)	48,147)	36,902)
Accrued sales and warranty returns	43,355)	35,696)	32,418)	32,356)	34,310)	20,025)
Other	120,089)	93,797)	84,005)	65,422)	62,628)	80,461)
Accrued expenses and other	1,000,841)	1,008,701)	1,039,788)	827,668)	621,932)	606,894)
Income taxes payable	52,478)	34,938)	79,474)	75,253)	25,297)	12,415)
Current liabilities	8,511,856)	8,588,393)	7,369,754)	6,283,091)	5,512,141)	5,028,681)
Long-term debt	7,668,549)	6,122,092)	5,269,820)	5,513,371)	5,206,344)	5,005,930)
Operating lease liabilities, less current portion	2,917,046)	2,837,973)	2,632,842)	2,501,560)	—)	—)
Deferred income taxes	536,278)	533,884)	337,125)	354,186)	311,980)	285,204)
Finance lease liabilities, less current portion	200,702)	217,428)	186,122)	155,855)	123,659)	102,013)
Other long-term liabilities	501,341)	514,186)	518,072)	493,786)	455,640)	445,507)
Long-term liabilities	11,823,916)	10,225,563)	8,943,981)	9,018,758)	6,097,623)	5,838,654)
Total liabilities	20,335,772)	18,813,956)	16,313,735)	15,301,849)	11,609,764)	10,867,335)
Preferred stock; no shares issued	—)	—)	—)	—)	—)	—)
Common stock, par value $.01 per share	189)	207)	230)	237)	254)	275)
Additional paid-in capital	1,484,992)	1,354,252)	1,465,669)	1,283,495)	1,264,448)	1,155,426)
Retained deficit	(2,959,278)	(1,330,067)	(419,829)	(1,450,970)	(1,305,347)	(1,208,824)
Accumulated other comprehensive loss	(190,836)	(300,536)	(307,986)	(354,252)	(269,322)	(235,805)
Treasury stock, at cost	(2,684,961)	(3,262,769)	(2,535,620)	(356,487)	(1,403,884)	(1,231,427)
Stockholders’ deficit	(4,349,894)	(3,538,913)	(1,797,536)	(877,977)	(1,713,851)	(1,520,355)
Total liabilities and stockholders’ deficit	15,985,878)	15,275,043)	14,516,199)	14,423,872)	9,895,913)	9,346,980)

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).

The financial position of the entity is characterized by a substantial increase in total liabilities and a deepening stockholders' deficit over the six-year period from August 2018 to August 2023. Total liabilities expanded from 10.87 billion USD to 20.34 billion USD, representing a significant increase in the organization's total obligations. Simultaneously, the stockholders' deficit widened from 1.52 billion USD in 2018 to 4.35 billion USD in 2023, indicating a capital structure heavily reliant on debt and funded through aggressive equity reductions.

Current Liabilities Trends: Current liabilities grew from 5.03 billion USD in 2018 to 8.51 billion USD in 2023. This growth was primarily driven by accounts payable, which increased from 4.41 billion USD to 7.20 billion USD. Accrued expenses and other current obligations also showed an upward trajectory, rising from 606.89 million USD to approximately 1.00 billion USD by 2023. The increase in accounts payable suggests a larger scale of operations or an extension of payment terms with suppliers.
Long-term Obligation Analysis: Long-term liabilities rose from 5.84 billion USD in 2018 to 11.82 billion USD in 2023. A key driver was the increase in long-term debt, which climbed from 5.01 billion USD to 7.67 billion USD. Notably, there was a significant shift in 2020 with the introduction of operating lease liabilities, which stood at 2.50 billion USD and grew to 2.92 billion USD by 2023, likely reflecting changes in accounting standards regarding lease recognition. Finance lease liabilities also saw a steady increase, rising from 102.01 million USD in 2018 to 200.70 million USD in 2023.
Stockholders' Equity and Deficit: The company maintains a negative equity position, which has deteriorated over the analyzed period. The retained deficit grew from 1.21 billion USD in 2018 to 2.96 billion USD in 2023, despite a temporary reduction in 2021. A primary contributor to the stockholders' deficit is the treasury stock account, which reached 3.26 billion USD in 2022 and ended at 2.68 billion USD in 2023. The magnitude of the treasury stock balance suggests an aggressive share repurchase strategy, which systematically reduces stockholders' equity and contributes to the overall deficit.
Overall Solvency Indicators: The widening gap between total liabilities and total assets is evident through the increasing stockholders' deficit. The total liabilities and stockholders' deficit figure rose from 9.35 billion USD in 2018 to 15.99 billion USD in 2023. The reliance on long-term debt and the accumulation of lease liabilities, paired with a negative equity base, indicates a highly leveraged financial strategy.

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