AutoZone Inc. (NYSE:AZO)

Total Asset Turnover

The reported total asset turnover ratio exhibited a decline from 1.2 in 2018 and 2019 to 0.88 in 2020, followed by a gradual recovery reaching 1.09 in 2023. The adjusted ratio showed a similar trend, decreasing from 1.05 in 2018 to 0.9 in 2020, then steadily increasing to 1.1 in 2023. This indicates an initial reduction in asset utilization efficiency during 2020 with subsequent improvement in later years.

Current Ratio

The reported current ratio was relatively stable around 0.9 in 2018 and 2019 but increased to 1.08 in 2020 before declining to 0.8 in 2023. The adjusted current ratio followed a comparable pattern, peaking at 1.03 in 2020 and decreasing to 0.79 by 2023. This suggests short-term liquidity strengthened temporarily in 2020 but weakened afterwards, remaining below the typical benchmark of 1.0 in recent years.

Debt to Capital

The reported debt to capital ratio showed variability, starting at 1.42 in 2018, decreasing to 1.18 in 2020, then rising sharply to 2.22 by 2022 and slightly declining to 2.21 in 2023. The adjusted ratio mirrored this trend with a gradual increase from 1.32 in 2018 to 1.54 in 2023. This pattern indicates a growing reliance on debt financing, particularly pronounced from 2021 onwards.

Net Profit Margin

The reported net profit margin increased steadily from 11.92% in 2018 to a peak of 14.95% in 2022, before slightly declining to 14.48% in 2023. The adjusted margin demonstrated more volatility but generally improved, rising from 10.65% in 2018 to a high of 18.12% in 2022, then falling to 14.75% in 2023. Overall, profitability improved over the period with some fluctuation in the most recent year.

Return on Assets (ROA)

The reported ROA decreased from 14.31% in 2018 to 12.01% in 2020, followed by an upward trend reaching 15.82% in 2023. The adjusted ROA exhibited similar variation but reached a higher peak of 19.35% in 2022 before decreasing to 16.24% in 2023. This indicates a dip in asset efficiency in 2020 with subsequent recovery and strong performance until a slight decline in the latest year.

The financial data demonstrates several key trends across the periods analyzed. Net sales have shown consistent growth year over year, increasing from approximately 11.2 billion US dollars in the first period to about 17.5 billion US dollars in the most recent period. This steady upward trajectory reflects expanding revenue generation over the six-year span.

Total assets have also grown significantly, rising from about 9.3 billion US dollars to nearly 16 billion US dollars. Notably, there is a substantial jump between the second and third periods, where total assets increased from approximately 9.9 billion to over 14.4 billion US dollars. This suggests notable asset accumulation or acquisitions during that interval. The growth in assets, though still positive, moderates somewhat in the subsequent years.

Reported total asset turnover illustrates the efficiency of asset utilization in generating sales. Initially, the ratio remains steady at 1.2 for the first two periods before declining sharply to 0.88 in the third period, followed by a gradual recovery to 1.09 by the final period. This pattern indicates a temporary reduction in asset utilization efficiency, possibly due to the rapid asset increase outpacing sales growth during the middle periods. However, efficiency improves again later, approaching the earlier levels.

Adjusted total assets—likely accounting for certain asset valuations or operational factors—follow a rising trend similar to total assets but present somewhat smoother increments. The adjusted total asset turnover ratio starts at 1.05, declines to 0.9 in the third period, and then recovers steadily to 1.10. This mirrors the reported total asset turnover trend with less volatility, suggesting adjustments provide a more stable view of asset efficiency over time.

Overall, the data indicates a company experiencing robust sales growth accompanied by substantial asset expansion, particularly around the third period. The temporary dip in asset turnover ratios during this phase reflects the lag between asset acquisition and efficient use in generating revenue. Recovery of these ratios in subsequent years highlights improved operational efficiency. The adjusted metrics reinforce these insights by smoothing out valuation differences, providing a clearer picture of the underlying asset utilization trends.

Current Assets

Current assets displayed an overall upward trajectory from 4,635,869 thousand US dollars in 2018 to 6,779,426 thousand US dollars in 2023. A notable increase occurred between 2019 and 2020, reaching a peak of 6,811,872 thousand US dollars. There was a slight decrease in 2021 before a gradual recovery in the following years.

Current Liabilities

Current liabilities consistently increased throughout the period, rising from 5,028,681 thousand US dollars in 2018 to 8,511,856 thousand US dollars in 2023. The growth appeared steady each year, with a more pronounced rise starting in 2020 and continuing through 2022, followed by a minor decline in 2023.

Reported Current Ratio

The reported current ratio fluctuated within a narrow range below or close to 1.0. It started at 0.92 in 2018, remained near 0.9 through 2019, improved to just above 1.0 in 2020 at 1.08, and then declined steadily to 0.8 by 2023. This suggests that liquidity improved temporarily in 2020 but weakened afterwards, indicating potential challenges in meeting short-term obligations.

Adjusted Current Assets

Adjusted current assets followed a similar pattern to reported current assets, increasing from 4,189,569 thousand US dollars in 2018 to 6,728,126 thousand US dollars in 2023. The adjustment slightly reduced the reported values, but the overall trend remained upward with the peak again noted in 2020 and a minor dip in 2021.

Adjusted Current Liabilities

Adjusted current liabilities rose consistently from 5,008,656 thousand US dollars in 2018 to 8,468,501 thousand US dollars in 2023, mirroring the reported liabilities' growth pattern. The increase was steady with a slightly faster pace after 2019.

Adjusted Current Ratio

The adjusted current ratio showed a similar trend to the reported current ratio, moving from 0.84 in 2018 to a peak of 1.03 in 2020, then decreasing to 0.79 by 2023. This ratio consistently remained below 1.1, reflecting tight liquidity and potential concern regarding the ability to cover current liabilities with available current assets.

The financial data demonstrates a consistent increase in the company's total debt over the six-year period, rising from approximately $5.16 billion in 2018 to about $7.96 billion in 2023. This upward trend indicates a growing reliance on debt financing. Meanwhile, the stockholders’ deficit fluctuates but generally shows an increasing negative balance, moving from a deficit of approximately $1.52 billion in 2018 to about $4.35 billion in 2023, which suggests a deteriorating equity position over time.

Adjusted total debt follows a similar pattern with an increase from approximately $7.01 billion in 2018 to $11.13 billion in 2023. This adjusted measure appears to account for additional liabilities or commitments beyond the reported total debt, highlighting a more substantial leverage situation. Correspondingly, the adjusted stockholders’ deficit maintains negative values and shows a larger magnitude consistently, increasing in absolute value from approximately $1.70 billion in 2018 to nearly $3.91 billion in 2023.

The data for reported and adjusted debt to equity ratios is absent, which limits specific ratio analysis. However, considering the opposing movements—rising debt levels and increasing negative equity—it can be inferred that the debt to equity ratios would likely be increasing, signifying heightened financial leverage and potential solvency concerns.

Overall, these trends suggest escalating financial risk, characterized by growing debt burdens combined with a worsening equity deficit. This may imply challenges in maintaining financial stability and may affect the company’s creditworthiness and flexibility in future financing activities.

Total Debt

The total debt has exhibited a general upward trend over the analyzed period, increasing from approximately $5.16 billion in 2018 to nearly $7.96 billion in 2023. Notably, there was a slight decline between 2020 and 2021, but the overall trajectory remains a significant rise in debt levels.

Total Capital

Total capital showed considerable fluctuation across the years. Starting at around $3.64 billion in 2018, it peaked at approximately $4.86 billion in 2020 before experiencing a sharp decline in 2022 to about $2.89 billion. By 2023, total capital recovered somewhat to around $3.61 billion but remained below earlier peak levels.

Reported Debt to Capital Ratio

This ratio fluctuated notably, reflecting changes in both debt and capital. After a steady range from 1.42 to 1.48 between 2018 and 2021, the ratio sharply increased to over 2.2 by 2022 and remained at a similar level in 2023. This indicates a growing leverage risk based on reported figures, with debt more than twice the capital in recent years.

Adjusted Total Debt

Adjusted total debt, which likely encompasses additional liabilities or off-balance-sheet items, follows a pattern similar to total debt but at higher absolute values. It rose consistently from about $7.01 billion in 2018 to over $11.13 billion in 2023, reflecting increased financial obligations beyond those captured by reported debt.

Adjusted Total Capital

Adjusted total capital also shows volatility but with a general upward trend from 2018 to 2020, increasing from approximately $5.32 billion to $7.60 billion. However, it declined in 2021 and 2022, with a modest recovery in 2023 to around $7.22 billion. The adjustments appear to smooth some volatility but still mirror the underlying fluctuations in reported capital.

Adjusted Debt to Capital Ratio

The adjusted debt to capital ratio demonstrated relative stability in the initial years, hovering close to 1.3 from 2018 to 2019, before decreasing to around 1.11 in 2020. Subsequently, it increased steadily to approximately 1.54 by 2023. This upward trend signals a rise in leverage, albeit less pronounced than the reported ratio, suggesting that the company’s adjusted leverage remains elevated but somewhat more balanced.

Over the observed period from 2018 to 2023, the total assets of the company exhibited a consistent upward trend, increasing from approximately $9.35 billion to nearly $16.0 billion. This growth suggests steady asset base expansion over the six-year span.

Conversely, the stockholders’ deficit showed significant fluctuations, starting at about negative $1.52 billion in 2018 and deepening to roughly negative $4.35 billion by 2023. Notably, there was an improvement in 2020, where the deficit reduced to approximately negative $877 million, before deteriorating again in subsequent years. This pattern indicates variability in the company's equity position, with an overall trend toward increased deficit.

Adjusted total assets followed a similar ascending pattern, rising from around $10.72 billion in 2018 to approximately $15.85 billion in 2023. This parallel movement with total assets reflects consistent adjustments aligned with the asset growth.

The adjusted stockholders’ deficit mirrored the trajectory of the reported deficit, although the values tended to be slightly more negative. Starting near negative $1.70 billion in 2018, the adjusted deficit decreased to about negative $866 million in 2020 before again increasing to negative $3.91 billion by 2023. This suggests that the adjustments made to the deficit did not fundamentally alter the trend but perhaps reflected a deeper deficit position.

Data for the reported and adjusted financial leverage ratios were not provided, hence no analysis can be made on leverage trends. However, considering the substantial negative values in stockholders' equity and the increase in total assets, leverage characteristics may imply a relatively high level of financial risk during recent years.

The data reveals a consistent growth trend in several key financial metrics over the examined periods. Net income shows a steady increase year over year, rising from approximately $1.34 billion in 2018 to about $2.53 billion in 2023. This upward trend indicates improving profitability and effective management of costs relative to sales.

Net sales exhibit continuous growth throughout the years, climbing from roughly $11.22 billion in 2018 to approximately $17.46 billion in 2023. The expansion in sales volume or pricing power is a positive indicator for the company’s market position and revenue-generating capability.

The reported net profit margin presents a generally positive trajectory. Starting at 11.92% in 2018, it increased to 14.95% in 2022 before slightly declining to 14.48% in 2023. This suggests the company has been able to enhance its operational efficiency and control costs, though the minor dip in the latest period may signal emerging margin pressures or cost increases.

Adjusted net income also shows a strong growth pattern, starting at about $1.20 billion in 2018 and peaking at nearly $2.94 billion in 2022 before decreasing to around $2.57 billion in 2023. The fluctuation here, especially the decline in 2023, could be related to adjustments for non-recurring or extraordinary items affecting comparability.

The adjusted net profit margin follows a similar pattern, improving markedly from 10.65% in 2018 to a high of 18.12% in 2022, then decreasing to 14.75% in 2023. This indicates that while the company had periods of significant profitability improvements when considering adjusted earnings, recent results show some contraction in these margins.

Overall, the analysis highlights strong sales growth and improving profitability metrics over the majority of the periods. The slight decreases in reported and adjusted margins and adjusted net income in the most recent year warrant attention, as these may reflect evolving market conditions, cost pressures, or other operational challenges.

Net income

The net income shows a consistent upward trend from 2018 to 2023, increasing from approximately 1.34 billion USD in 2018 to about 2.53 billion USD in 2023. The growth is steady each year, with notable increments particularly between 2020 and 2023.

Stockholders’ deficit

Stockholders’ deficit has fluctuated significantly over the period. Initially, it increased in deficit from around -1.52 billion USD in 2018 to -1.71 billion USD in 2019, improved substantially to -0.88 billion USD in 2020, but then worsened considerably in subsequent years, reaching approximately -4.35 billion USD in 2023. The sharp deterioration from 2021 onwards suggests increasing liabilities or reductions in equity.

Adjusted net income

Adjusted net income follows a trend similar to the reported net income, with continuous growth from 1.20 billion USD in 2018 to a peak of around 2.94 billion USD in 2022, before slightly declining to approximately 2.57 billion USD in 2023. This indicates positive operating performance after adjustments, with a high point in 2022 followed by a moderate decrease.

Adjusted stockholders’ deficit

Adjusted stockholders’ deficit displays a pattern analogous to the reported stockholders’ deficit. Starting at about -1.70 billion USD in 2018, it shows some improvement in 2020 to -0.87 billion USD but subsequently deteriorates significantly, reaching nearly -3.91 billion USD in 2023. This worsening trend post-2020 signals ongoing challenges in the company's equity position even after adjustments.

ROE metrics

Data for reported and adjusted return on equity (ROE) percentages are missing, limiting direct analysis of profitability relative to equity. However, given the increasing net income alongside a worsening stockholders’ deficit, the ROE likely exhibits volatility or decline, suggesting that net income growth is not effectively translating into higher equity returns due to the expanding deficit.

Net Income

Net income exhibited a generally upward trend over the six-year period. Starting at approximately 1.34 billion USD in 2018, it increased consistently each year, reaching about 2.53 billion USD by 2023. The most notable year-over-year increases occurred between 2020 and 2021, and again between 2021 and 2022, indicating strong profitability growth during these periods.

Total Assets

Total assets demonstrated steady growth throughout the period. Beginning at around 9.35 billion USD in 2018, assets grew to nearly 16 billion USD by 2023. The largest jump occurred between 2019 and 2020, when assets rose significantly from approximately 9.90 billion USD to over 14.42 billion USD, which suggests considerable expansion or investment during that year.

Reported Return on Assets (ROA)

The reported ROA showed some variability but remained within a range of approximately 12% to 16%. The ROA peaked at 16.34% in 2019, followed by a dip to 12.01% in 2020, before climbing again to around 15.82% in 2023. This indicates that the company’s efficiency in generating profits from its asset base fluctuated but generally maintained a strong performance level.

Adjusted Net Income

The adjusted net income figures followed a similar upward trend to the unadjusted net income, starting from roughly 1.20 billion USD in 2018 and peaking near 2.94 billion USD in 2022 before slightly declining to approximately 2.57 billion USD in 2023. The adjustment measures appear to highlight even stronger profitability growth than the reported net income, especially noticeable in 2022.

Adjusted Total Assets

Adjusted total assets also increased steadily from about 10.72 billion USD in 2018 to approximately 15.85 billion USD in 2023. The increases were gradual and consistent, reflecting ongoing asset growth, possibly adjusted for revaluations or other accounting treatments.

Adjusted Return on Assets (Adjusted ROA)

Adjusted ROA showed an increase over time with some fluctuations. It rose from 11.15% in 2018 to a high of 19.35% in 2022, indicating improved profitability relative to adjusted asset levels. However, there was a decrease to 16.24% in 2023, suggesting a slight moderation in asset profitability after the peak in the prior year.

Summary Insights

Overall, the data illustrate strong growth in profitability and asset expansion across the period under review. Both net income and adjusted net income increased significantly, with asset bases also growing notably, especially between 2019 and 2020. The return on assets measures, both reported and adjusted, indicate that the company maintained a generally efficient use of its assets, although with some volatility. The peak in adjusted ROA in 2022 followed by a decline in 2023 suggests potential challenges or changes in operating conditions affecting asset productivity in the most recent year.