AutoZone Inc. (NYSE:AZO)

Debt to Capital

The debt to capital ratio exhibits moderate fluctuations over the analyzed period. Initially, from late 2017 through early 2020, it remains relatively stable, oscillating roughly between 1.36 and 1.51. A significant decline occurs around mid-2020, dropping to approximately 1.19, followed by a gradual increase through 2021. Starting in early 2022, the ratio sharply rises from 1.68, peaking at 2.55 by the end of 2023. This trend indicates an increasing reliance on debt financing relative to the company's capital base in recent quarters.

Debt to Capital (Including Operating Lease Liability)

When incorporating operating lease liabilities, the debt to capital ratio demonstrates a similar overall pattern but at consistently lower values compared to the standard debt to capital measure. Initial values range from 1.36 to 1.49 until early 2020, followed by a decline to about 1.12 in mid-2020. Post mid-2020, the ratio increases gradually, reaching 1.79 by late 2023. This suggests that including operating leases lowers the measured indebtedness relative to capital but continues to show a rising trend in recent periods.

Debt to Assets

The debt to assets ratio shows a moderate decrease from around 0.53-0.54 in late 2017 to approximately 0.36-0.38 in late 2020 and early 2021, reflecting a reduction in debt relative to total assets during that interval. However, beginning in early 2022, the ratio trends upwards, climbing from 0.36 to 0.53 by the end of 2023. This indicates an increasing percentage of assets funded through debt in the more recent quarters.

Debt to Assets (Including Operating Lease Liability)

Including operating lease liabilities, the debt to assets ratio consistently reports higher values than the standard measure, beginning around 0.53-0.54, and spiking to 0.63-0.64 during early 2020. It then declines to roughly 0.56 by early 2021 before increasing again from early 2022 onward, reaching 0.72 at the end of 2023. The inclusion of operating leases highlights a greater leveraged position relative to total assets throughout the period, with a notable rising trend recently.

Overall Insights

The data indicates a trend of increasing leverage ratios from early 2022 through the end of 2023, as shown by multiple measures. Prior to this period, there was a decline or stabilization in leverage, especially around mid-2020, likely reflecting deleveraging or balance sheet adjustments. The upward movement in leverage ratios more recently suggests growing debt levels relative to both capital and assets, potentially reflecting changes in financing strategy or investments financed by debt. The difference in levels between metrics that include operating lease liabilities and those that do not emphasizes the significant impact of off-balance-sheet obligations on the company’s financial leverage profile.

The quarterly financial data reveal several significant trends in the company's leverage and equity position over the analyzed period.

Total debt

The total debt consistently increased from approximately 4.98 billion USD in November 2017 to about 8.58 billion USD in November 2023. There was a gradual upward trend with occasional periods of stabilization or minor decreases, such as a slight dip observed around early 2021. However, from 2022 onwards, total debt accelerated its growth, reaching the highest recorded value by the end of 2023.

Stockholders’ deficit

The stockholders’ deficit showed a worsening trend across the period. Starting from approximately -1.53 billion USD in November 2017, the deficit deepened significantly, especially after 2019. Notable deterioration occurred between early 2021 and 2023, with the deficit expanding from around -1.5 billion USD to over -5.2 billion USD by November 2023. This indicates increasing negative equity and potentially growing financial strain for shareholders.

Debt to equity ratio

No explicit data were provided for the debt to equity ratio. Nevertheless, considering both total debt and stockholders’ deficit trends, it can be inferred that the leverage ratio is markedly high and likely increasing. The combination of mounting debt and expanding deficit suggests the company’s financial structure is becoming more leveraged and potentially more risky over time.

Overall, the financial indicators reflect a rising reliance on debt financing accompanied by a substantial decline in shareholder equity. This pattern may indicate strategic financing decisions but also underscores potential vulnerabilities related to solvency and financial stability.

The financial data indicates several notable trends and shifts over the observed quarterly periods.

Total Debt (including operating lease liability)

The total debt level remained relatively stable from November 2017 through August 2019, fluctuating around the 5,000,000 to 5,200,000 thousand US dollars range. However, beginning with November 2019, there was a sharp increase to approximately 8,026,702 thousand US dollars, marking a significant rise in liabilities. This elevated debt level has shown a general upward trend since then, reaching over 11,783,104 thousand US dollars by November 2023. This suggests a strategy that involved increasing leverage, possibly to support expansion, acquisitions, or other capital-intensive initiatives.

Stockholders’ Deficit

The stockholders’ deficit was negative throughout the entire timeframe, reflecting more liabilities than equity. Initially, the deficit hovered around -1,500,000 to -1,300,000 thousand US dollars from late 2017 to late 2018. From early 2019 onwards, the deficit deepened steadily with some fluctuations. Notably, after February 2020, the deficit worsened significantly, reaching over -5,213,671 thousand US dollars by November 2023. This consistent increase in negative equity may indicate accumulated losses, dividend payments in excess of earnings, or share repurchases, suggesting a weakening equity base.

Debt to Equity Ratio (including operating lease liability)

The debt to equity ratio data is missing; thus, specific quantitative analysis is not possible. Nevertheless, given the rising total debt and increasing stockholders’ deficit, it can be inferred that the debt to equity ratio has worsened significantly over time. The escalating debt, combined with a deepening negative equity, suggests increasing financial leverage and potentially higher financial risk.

In summary, the company appears to have substantially increased its debt burden from late 2019 onward, coinciding with a growing stockholders’ deficit. This combination points to a deteriorating financial structure marked by increased leverage and a weakened equity position, which could affect financial stability and risk profile if the trends persist.

The analysis of the quarterly financial data reveals several notable trends in the company's capital structure, specifically focusing on total debt, total capital, and the debt to capital ratio.

Total Debt

Total debt values show a general upward trend over the reported periods. Starting at approximately 4.98 billion US dollars in late 2017, the debt level incrementally increases with minor fluctuations to peak at around 8.58 billion US dollars by the fourth quarter of 2023. This represents a substantial increase in borrowing or liabilities over the six-year span.

Total Capital

Total capital figures exhibit a more volatile pattern compared to total debt. Initially positioned near 3.46 billion US dollars in November 2017, capital values fluctuate over the years, reaching a high point of approximately 4.64 billion US dollars in mid-2020. Post mid-2020, a declining trend is observed, with capital decreasing steadily to around 3.37 billion US dollars by late 2023. Overall, capital has experienced contraction in the latter periods after an earlier rise.

Debt to Capital Ratio

The debt to capital ratio illustrates the relationship and relative proportion of debt financing to the company's capital base. Initially above 1.3, the ratio exhibits moderate variation until mid-2020, including a notable dip to near 1.19, suggesting a temporary improvement in capital structure. However, from mid-2020 onward, there is a marked and continuous increase in this ratio, reaching approximately 2.55 by the end of 2023. This upward trend signifies an increasing reliance on debt relative to capital, potentially indicating higher financial leverage and associated risks.

In summary, the company's financial data reveals a consistent rise in total debt, contrasting with a more unstable and ultimately declining total capital in recent periods. The increasing debt to capital ratio underscores a growing dependency on debt financing, which may impact the company's financial risk profile and capital management strategies going forward.

The data reveals evolving trends in the company's leverage and capital structure over multiple quarters from late 2017 through late 2023. Analysis focuses on the total debt including operating lease liabilities, total capital including operating lease liabilities, and the debt to capital ratio.

Total Debt (including operating lease liability)

The total debt levels remained relatively stable between approximately $4.95 billion and $5.2 billion from November 2017 until August 2019. Thereafter, a substantial increase is observed starting from November 2019, where debt levels rose sharply to around $8 billion, maintaining an upward trajectory through 2023. By November 2023, total debt reached approximately $11.78 billion, representing more than a doubling compared to the levels prior to late 2019.

Total Capital (including operating lease liability)

Total capital exhibited more variability, initially fluctuating around the $3.5 billion to $3.7 billion range through 2019, mirroring the debt levels in stability. At the November 2019 point, capital also increased markedly to approximately $6.25 billion. Subsequent quarters show continuing variation with capital peaking around $7.36 billion in August 2020 but generally trending downward thereafter, falling to approximately $5.6 billion by late 2022. From early 2023, capital showed a modest recovery, rising again toward $6.57 billion by November 2023. Overall, capital changes appear less consistent than debt, with a notable peak during 2020 followed by a decline and partial recovery.

Debt to Capital Ratio (including operating lease liability)

The ratio of debt to capital displays a clear pattern aligned with the movements in debt and capital. From November 2017 to August 2019, the ratio fluctuated narrowly between approximately 1.36 and 1.49, indicating stable leverage with debt consistently exceeding capital by a moderate margin.

A sharp decline in the ratio occurs starting November 2019, dropping to a low of around 1.12 by August 2020, corresponding with the capital peak and somewhat stabilized debt level, suggesting a temporary decrease in relative leverage.

Following this low, the ratio trends upward steadily through 2023, reaching a peak of about 1.79 in November 2023. This reflects the combined effect of increased debt and somewhat stagnant or fluctuating capital levels, signaling a rising leverage position and higher reliance on debt financing relative to capital over recent periods.

In summary, the company experienced a significant increase in total debt beginning late 2019, more than doubling by late 2023. Total capital increased initially around the same time but then generally declined until a mild recovery in 2023. The resulting debt to capital ratio decreased substantially in 2020 before rising consistently through 2023 to its highest observed level, indicating growing leverage and an increased proportion of debt in the capital structure over the analyzed period.

The analysis of the quarterly financial data reveals several noteworthy trends in the company's capital structure and asset base over the observed period.

Total Debt

The total debt exhibited a gradual increase from approximately $4.98 billion in late 2017 to around $5.52 billion by late 2020, showing relative stability with minor fluctuations. However, starting in early 2021, total debt initially declined slightly before experiencing a pronounced upward trend from early 2022 through late 2023, ultimately reaching approximately $8.58 billion. This recent increase represents a significant acceleration in debt accumulation compared to prior periods.

Total Assets

Total assets remained fairly stable within the range of about $9.3 billion to $9.8 billion from late 2017 through early 2019. Beginning in late 2019, there was a marked jump in asset base, rising sharply to over $12.7 billion and continuing to grow steadily, reaching nearly $16.3 billion by the end of 2023. This substantial growth in assets could indicate expansion efforts or acquisitions during this period.

Debt to Assets Ratio

The debt-to-assets ratio hovered consistently around 0.53 to 0.54 through 2017 and 2018, implying over half of the assets were financed by debt. Entering 2019 and extending through late 2020, this ratio declined markedly to as low as 0.36–0.39, reflecting improved leverage and potentially reduced risk from debt financing. Nonetheless, from early 2022 onwards, the ratio reversed course and climbed steadily to 0.53 by late 2023. This shift corresponds with the increase in total debt outpacing asset growth, signaling a return to higher leverage.

Overall, the company displayed a conservative leverage profile with controlled debt levels relative to assets until approximately 2020. Following a period of asset accumulation and reduced leverage, the recent upward trajectory in both total debt and the debt-to-assets ratio suggests an increased reliance on debt financing. Concurrently, the steady asset growth indicates ongoing investment or expansion strategies. The recent patterns warrant close monitoring to assess the sustainability of leverage levels and the implications for financial risk.

The financial data exhibits several noteworthy trends regarding the company's leverage and asset base over the reported periods. Total debt, including operating lease liabilities, oscillates with initial stability followed by a marked increase post-2019. Total assets also show a generally upward trajectory with some fluctuations.

Total Debt (Including Operating Lease Liability)

The total debt remains relatively stable around the 5,000,000 thousand US dollars mark until mid-2019. Beginning in the quarter ending November 2019, a significant increase is observed, with debt escalating from approximately 5,206,344 thousand US dollars to over 11,783,104 thousand US dollars by the last period reported in November 2023. This doubling of debt in this timeframe suggests that the company may have leveraged additional funding sources or assumed additional liabilities, possibly in connection with operational or expansion activities.

Total Assets

Total assets maintain a consistent growth trend throughout the period, starting at approximately 9,397,084 thousand US dollars in November 2017 and rising to nearly 16,292,570 thousand US dollars by November 2023. Despite minor fluctuations between quarters, the general trend points to asset growth, indicative of investments in property, equipment, or possibly increased inventory or receivables, consistent with business expansion or capital strengthening.

Debt to Assets Ratio (Including Operating Lease Liability)

This ratio reflects the relationship between total debt and total assets, effectively measuring leverage. Initially, the ratio is stable near 0.53 to 0.54, signaling that just over half of the asset base is financed through debt. However, from late 2019 onward, the ratio rises noticeably, peaking at 0.72 in the last quarter of 2023. This upward trend aligns with the significant increase in total debt and indicates a growing reliance on debt financing relative to asset accumulation. An increasing leverage ratio, particularly one reaching over 0.7, typically warrants attention as it may imply higher financial risk and potential implications for creditworthiness and interest obligations.

In summary, the data presents a pattern of substantial debt accumulation beginning in late 2019 alongside a steady increase in the asset base. The rising debt to assets ratio points to a strategic choice or necessity to increase financial leverage, which may reflect expansion efforts or changing capital structure preferences. This pattern suggests a need for ongoing monitoring of debt servicing capacity and assessment of the associated financial risks.

The analysis of the quarterly financial data reveals several important trends and fluctuations in key financial items over the observed periods.

Total assets

Total assets exhibit a general upward trajectory from approximately US$9.4 billion in late 2017 to over US$16.3 billion by late 2023. Although there are minor fluctuations in some quarters, the overall growth suggests active asset accumulation or appreciation, with noticeable jumps around late 2019 and mid-2020, possibly indicative of strategic acquisitions or capital investments during those times.

Stockholders’ deficit

The stockholders’ deficit shows a consistently negative balance throughout the periods, starting at around US$-1.5 billion in late 2017 and expanding to over US$-5.2 billion by the end of 2023. This increasing deficit could signal rising accumulated losses or substantial share repurchases impacting equity. The deficit notably deteriorated from early 2020, reaching more pronounced negative values, which might reflect financial challenges or aggressive capital structure changes occurring in this timeframe.

Financial leverage

Financial leverage data is absent for all periods, limiting the ability to assess the relationship between debt and equity or the use of debt financing within the observed timeline. This gap restricts a comprehensive evaluation of solvency and financial risk associated with leverage.

In summary, the asset base has expanded steadily, while the equity position has weakened significantly, suggesting increasing reliance on liabilities or potential financial restructuring effects. The lack of financial leverage figures prevents a more detailed examination of risk exposure related to capital structure shifts.