Constellation Brands Inc. (NYSE:STZ)

Total Asset Turnover

The reported total asset turnover ratio exhibits a downward trend from 0.39 in 2017 to a low of 0.28 in 2019, followed by a gradual recovery to 0.34 in 2022. The adjusted total asset turnover similarly follows this pattern but indicates a slightly better recovery, ending at 0.38 in 2022. Overall, asset utilization weakened initially but showed signs of improvement in later periods.

Current Ratio

The current ratio, both reported and adjusted, shows significant fluctuations. It improved from 1.2 in 2017 to a peak of 2.4 in 2021, indicating a stronger short-term liquidity position. However, it sharply declined to approximately 1.23 in 2022, suggesting a decrease in liquidity after previously high levels.

Debt to Equity Ratio

The reported debt to equity ratio consistently decreased from 1.34 in 2017 to 0.77 in 2021, indicating reduced reliance on debt financing relative to equity. In 2022, it rose slightly to 0.89. The adjusted debt to equity ratio fluctuated but remained around 1.2 until 2020, decreased to 0.91 in 2021, and increased again to 1.06 in 2022, reflecting some volatility in adjusted financial leverage.

Debt to Capital Ratio

The reported debt to capital ratio gradually declined from 0.57 in 2017 to 0.43 in 2021 before increasing to 0.47 in 2022. The adjusted measure remained relatively stable around 0.55-0.56 until 2020, then decreased in 2021 to 0.48 and increased slightly in 2022. This suggests an overall modest reduction in the proportion of debt within the capital structure, with some recent increase.

Financial Leverage

The reported financial leverage ratio shows a clear downward trend from 2.7 in 2017 to 1.99 in 2021, followed by a slight increase to 2.2 in 2022. The adjusted financial leverage ratio remains fairly stable from 2017 to 2020 around 2.35-2.42, then decreases sharply to 2.05 in 2021 before rising slightly to 2.27 in 2022. This indicates a reduction in leverage in recent years, although some increase is seen in the latest period.

Net Profit Margin

Reported net profit margin increased markedly from 20.94% in 2017 to a peak of 42.33% in 2019, then dropped sharply to -0.14% in 2020. It rebounded to 23.19% in 2021 but declined again to -0.46% in 2022. The adjusted net profit margin shows a similar pattern with more pronounced volatility, reaching a high of 45.98% in 2019 and a low of -12.45% in 2020, followed by recovery and a slight positive return of 1.35% in 2022. This pattern indicates significant earnings volatility, particularly associated with the years around 2020.

Return on Equity (ROE)

Reported ROE increased from 22.28% in 2017 to 28.82% in 2018, then declined to 27.38% in 2019 before turning negative (-0.1%) in 2020. It recovered to 14.69% in 2021 but fell back to -0.34% in 2022. Adjusted ROE exhibits greater volatility, with a notable negative value of -10.18% in 2020 and a modest recovery to 1.16% by 2022. Overall, the company experienced significant disruptions in equity returns, especially around 2020, followed by partial recovery.

Return on Assets (ROA)

Reported ROA trends similarly, starting at 8.25% in 2017 and peaking at 11.75% in 2019, followed by a sharp drop to near zero (-0.04%) in 2020. It partially rebounded to 7.37% in 2021 but declined again to -0.16% in 2022. Adjusted ROA follows this pattern with greater variation, turning negative (-4.21%) in 2020 and showing some recovery to a positive 0.51% in 2022. These trends reflect challenges in asset profitability during the pandemic period and a modest improvement thereafter.

The financial data exhibits several notable trends regarding sales and asset utilization over the six-year period analyzed.

Net Sales

There is a consistent upward trend in net sales from 2017 through 2022, increasing from approximately 7.33 billion US dollars to about 8.82 billion US dollars. This growth reflects a gradual but steady expansion in revenue generation year over year.

Total Assets

Total assets show a different pattern, initially increasing from around 18.60 billion US dollars in 2017 to a peak of approximately 29.23 billion US dollars in 2019. However, after 2019, total assets decline steadily each year, reaching about 25.86 billion US dollars by 2022. This suggests a strategic reduction or reallocation of asset base following the peak in 2019.

Reported Total Asset Turnover

The reported total asset turnover ratio decreases from 0.39 in 2017 to 0.28 in 2019, indicating reduced efficiency in using assets to generate sales during this period. After 2019, this ratio improves gradually, moving to 0.34 by 2022, implying better asset utilization in recent years.

Adjusted Net Sales and Total Assets

Adjusted net sales follow a similar growth pattern to reported net sales but shows a slightly higher figure in 2022, amounting to 8.94 billion US dollars. Adjusted total assets also increase from about 19.00 billion US dollars in 2017 to a peak near 27.50 billion US dollars in 2019, followed by a decline to roughly 23.50 billion US dollars in 2022. This adjustment confirms the observed asset reduction trend post-2019.

Adjusted Total Asset Turnover

The adjusted total asset turnover experiences a decline from 0.39 in 2017 to 0.30 in 2019, mirroring the reported trend of reduced asset efficiency. From 2019 onwards, this ratio increases steadily, reaching 0.38 in 2022, indicating a recovery in asset utilization efficiency over the latest years.

Overall, the data reflects a phase of asset growth and declining asset efficiency up to 2019, followed by a period of asset base contraction coupled with improved asset turnover ratios. Concurrently, sales demonstrate consistent growth throughout the duration, suggesting effective sales strategies despite fluctuations in asset volumes and utilization rates.

Current Assets

Current assets exhibit fluctuations over the six-year period. Starting at 3,230,000 thousand USD in early 2017, the value increased steadily until early 2019, reaching 3,684,000 thousand USD. Subsequently, there was a decline in 2020 to 3,484,100 thousand USD and a more pronounced decrease in 2021 to 3,044,500 thousand USD. The figure then rose again in 2022 to 3,329,700 thousand USD, indicating some recovery.

Current Liabilities

Current liabilities showed considerable volatility. The level decreased sharply from 2,697,600 thousand USD in 2017 to 1,944,700 thousand USD in 2018. However, in 2019, liabilities surged to 3,163,800 thousand USD, followed by a significant reduction in 2020 to 2,311,800 thousand USD. The lowest point occurred in 2021 at 1,269,100 thousand USD, before sharply increasing again to 2,698,800 thousand USD in 2022. This pattern suggests inconsistent management or external factors affecting short-term obligations.

Reported Current Ratio

The reported current ratio, reflecting liquidity, mirrored the movements in both current assets and liabilities. It began at 1.2 in 2017, improved markedly to 1.79 in 2018, and declined to 1.16 in 2019. In 2020, liquidity improved notably to 1.51 and peaked at 2.4 in 2021, indicating a strong short-term solvency position. However, the ratio decreased sharply in 2022 to 1.23, signifying a weakening in liquidity compared to the prior year.

Adjusted Current Liabilities and Adjusted Current Ratio

The adjusted current liabilities closely follow the reported current liabilities with minor divergence in 2022. This slight adjustment leads to a slightly higher adjusted current ratio of 1.25 in 2022 compared to the reported value of 1.23, indicating a minor improvement in the assessment of liquidity when adjustments are considered. Overall, the adjusted current ratio trends align with the reported ratio, showing liquidity improvements in 2018, declines in 2019, strong liquidity in 2020 and 2021, followed by a decrease in 2022.

The presented financial data shows several evolving trends concerning debt and equity positions over the six-year period from February 2017 to February 2022.

Total Debt

Total debt exhibited an overall upward trend from 9,238,100 thousand US dollars in 2017 to a peak of 13,616,500 thousand US dollars in 2019, followed by a gradual decline to approximately 10,416,500 thousand US dollars by 2022. This pattern indicates an initial phase of increasing leverage, which subsequently reversed towards reducing total liabilities.

Total Stockholders’ Equity

Stockholders’ equity initially increased significantly from 6,891,200 thousand US dollars in 2017 to 12,551,000 thousand US dollars in 2019, reflecting an expansion in equity base. After a slight dip in 2020, equity rose again reaching its highest point in 2021 with 13,598,900 thousand US dollars, before declining to 11,731,900 thousand US dollars by 2022. These fluctuations indicate varied performance in retained earnings, equity injections, or revaluation effects during the period.

Reported Debt to Equity Ratio

This ratio progressively decreased from 1.34 in 2017 to a low of 0.77 in 2021, showing a lowering of financial leverage and a stronger equity base relative to debt. However, a slight increase to 0.89 in 2022 suggests a modest reversal in this deleveraging trend.

Adjusted Total Debt

The adjusted debt figures mirror the total debt trend with values rising from approximately 9,633,411 thousand US dollars in 2017 to a peak in 2019 of about 14,066,924 thousand US dollars, then decreasing steadily to roughly 10,954,200 thousand US dollars in 2022. These figures account for possible reclassifications or adjustments, providing a more comprehensive view of indebtedness.

Adjusted Total Stockholders’ Equity

Adjusted equity showed steady growth from 8,017,200 thousand US dollars in 2017 to 11,683,600 thousand US dollars in 2019, followed by a decline to 10,201,900 thousand US dollars in 2020. Thereafter, equity recovered to over 12,006,300 thousand US dollars in 2021 but dropped again to approximately 10,348,200 thousand US dollars in 2022, indicating variability possibly linked to adjustments for other comprehensive income or minority interests.

Adjusted Debt to Equity Ratio

The adjusted debt to equity ratio remained relatively stable around 1.2 in the initial years (2017-2019), increased to 1.25 in 2020, then decreased sharply to 0.91 in 2021 before rising again to 1.06 in 2022. This fluctuation suggests that relative leverage, when accounting for adjustments, experienced periods of both increased and decreased financial risk.

In summary, the company experienced a phase of increasing leverage up to 2019, followed by efforts to reduce debt and strengthen equity, evident from declining debt to equity ratios until 2021. However, some reversal in these trends occurred in 2022, indicated by slight increases in leverage ratios and declines in equity. Adjusted figures broadly corroborate these patterns, reflecting the company’s variable capital structure management over time.

An analysis of the financial data over the six-year period indicates several notable trends in the company's leverage and capital structure.

Total Debt and Total Capital

Total debt exhibited an overall increasing trend from 9,238,100 thousand USD in 2017 to a peak of 13,616,500 thousand USD in 2019, followed by a gradual reduction to 10,416,500 thousand USD by 2022. Conversely, total capital rose substantially from 16,129,300 thousand USD in 2017 to a peak of 26,167,500 thousand USD in 2019, then declined steadily to 22,148,400 thousand USD in 2022.

Reported Debt to Capital Ratio

This ratio decreased consistently from 0.57 in 2017 to 0.50 in 2020, indicating a reduction in debt proportion relative to capital during that span. The ratio further dropped to its lowest point of 0.43 in 2021, suggesting a notably lower reliance on debt financing. However, in 2022, the ratio rose modestly to 0.47, pointing to a slight increase in leverage relative to the prior year.

Adjusted Total Debt and Adjusted Total Capital

Adjusted total debt followed a pattern similar to total debt, increasing from 9,633,411 thousand USD in 2017 to a maximum of 14,066,924 thousand USD in 2019, then decreasing to 10,954,200 thousand USD by 2022. Adjusted total capital rose from 17,650,611 thousand USD in 2017 to peak at 25,750,524 thousand USD in 2019. It subsequently declined to 21,302,400 thousand USD in 2022.

Adjusted Debt to Capital Ratio

The adjusted debt to capital ratio remained steady at 0.55 from 2017 through 2019, then increased slightly to 0.56 in 2020, indicating a marginally higher leverage. This ratio dropped significantly to 0.48 in 2021, reflecting a reduction in adjusted debt relative to capital. However, it increased again to 0.51 in 2022, showing a partial reversal of the prior year's deleveraging.

Overall, the data suggests that the company reduced its debt relative to capital between 2019 and 2021, achieving lower leverage ratios, before experiencing a modest increase in leverage in 2022. The decline in both total and adjusted capital after 2019 may reflect changes in equity or retained earnings, and the pattern of adjusted ratios indicates that adjustments to debt and capital measures affect the interpretation of financial leverage. The company's leverage management appears to have been dynamic, with a focus on deleveraging during the COVID-19 pandemic period, followed by slight re-leveraging in the most recent year.

The annual financial data reveals several notable trends in asset levels, equity, and leverage ratios over the six-year period.

Total assets

Total assets increased substantially from 18.6 billion USD in 2017 to a peak of 29.2 billion USD in 2019 before declining to 25.9 billion USD by 2022. This pattern indicates an expansion phase followed by a gradual contraction or divestment.

Total CBI stockholders’ equity

Stockholders’ equity followed an increasing trend from 6.9 billion USD in 2017 to 12.6 billion USD in 2019, subsequently experiencing fluctuations with a peak again in 2021 at approximately 13.6 billion USD, then declining to 11.7 billion USD in 2022. This suggests growth in retained earnings or capital contributions until 2021, followed by a reduction possibly due to losses, dividends, or repurchases.

Reported financial leverage

Reported financial leverage steadily decreased over the period from 2.7 in 2017 to a low of 1.99 in 2021, indicating a reduction in asset-to-equity ratio and potentially less reliance on debt. However, a slight increase to 2.2 in 2022 suggests a moderate rebound in leverage.

Adjusted total assets

Adjusted total assets trend closely mirrors reported total assets but at generally lower levels. They rose from 19.0 billion USD in 2017 to a maximum around 27.5 billion USD in 2019 and then declined to 23.5 billion USD in 2022. This adjustment likely accounts for asset revaluations or exclusions that moderate the asset base.

Adjusted total stockholders’ equity

Adjusted equity rose consistently from 8.0 billion USD in 2017 to 11.7 billion USD in 2019, declined to about 10.2 billion USD in 2020, rebounded to 12.0 billion USD in 2021, and decreased again to 10.3 billion USD in 2022. The fluctuations reflect changes in equity under adjusted accounting methods, with a general upward trend interrupted by volatility in 2020 and 2022.

Adjusted financial leverage

Adjusted financial leverage remained relatively stable between 2.35 and 2.42 from 2017 through 2020, indicating steady capital structure during this period. It decreased significantly to 2.05 in 2021, then rose again to 2.27 in 2022, suggesting a temporary reduction in leverage followed by a partial increase.

In summary, the company demonstrated growth in asset and equity bases through 2019, followed by some volatility and decline through 2022. Both reported and adjusted leverage ratios showed a general downward trend until 2021, indicative of deleveraging efforts, before incrementally rising in the most recent year. These patterns suggest strategic shifts in capital structure and asset management, possibly reflecting market conditions or corporate initiatives undertaken in recent years.

Net Income (Loss) Attributable to CBI

The net income exhibited significant volatility over the analyzed periods. It increased steadily from $1,535,100 thousand in 2017 to a peak of $3,435,900 thousand in 2019. However, there was a sharp decline to a loss of $11,800 thousand in 2020, followed by a partial recovery to a positive $1,998,000 thousand in 2021. The year 2022 again saw a return to negative territory with a loss of $40,400 thousand. This pattern reflects considerable fluctuations, possibly influenced by external factors affecting profitability.

Net Sales

Net sales showed a consistent upward trend throughout the period, rising from $7,331,500 thousand in 2017 to $8,820,700 thousand in 2022. The growth rate appears steady, with no declines or significant disruptions, indicating stable sales performance and potentially expanding market demand or effective sales strategies.

Reported Net Profit Margin

The reported net profit margin followed a variable trajectory. It increased from 20.94% in 2017 to a high of 42.33% in 2019, demonstrating improving profitability relative to sales. However, this was followed by a sharp drop to -0.14% in 2020, indicating a slight loss margin. It rebounded to 23.19% in 2021 but again slipped to -0.46% in 2022. These fluctuations align with the volatility observed in the net income figures, underscoring challenges in maintaining consistent profitability.

Adjusted Net Income

The adjusted net income data reveal a similar but more pronounced pattern of volatility. After rising from $1,699,200 thousand in 2017 to $3,731,400 thousand in 2019, it abruptly turned negative at -$1,038,900 thousand in 2020. A strong recovery followed in 2021 with $2,276,800 thousand, though this was dramatically reduced to $120,500 thousand in 2022. The adjusted figures suggest that extraordinary items and adjustments had a significant impact on net income, particularly in the years 2020 and 2022.

Adjusted Net Sales

Adjusted net sales mirrored the net sales trend, showing continuous growth from $7,331,500 thousand in 2017 to $8,939,000 thousand in 2022. The steady increase reflects positive top-line developments unaffected by adjustments.

Adjusted Net Profit Margin

The adjusted net profit margin demonstrated strong profitability up to 2019, reaching 45.98%, which is notably higher than the reported margin for that year. This was followed by a steep decline to -12.45% in 2020, indicating a significant adjusted loss margin. The margin recovered to 26.43% in 2021 but decreased sharply to 1.35% in 2022. These figures imply that while the company generally maintained robust adjusted profitability before 2020, extraordinary challenges significantly eroded profits in subsequent years, with only a marginal positive margin recorded in 2022.

The financial data reveals significant fluctuations in the company's profitability and equity over the six-year period ending in February 2022.

Net Income Attributable to CBI

The net income showed a rising trend from 2017 through 2019, increasing from approximately $1.54 billion to $3.44 billion. However, in 2020 there was a sharp reversal with a net loss of $11.8 million, followed by a recovery to nearly $2 billion in 2021. The most recent year, 2022, again showed a loss of $40.4 million, indicating volatility in profitability.

Total Stockholders’ Equity

The total stockholders’ equity generally expanded over the period, growing from about $6.89 billion in 2017 to peak at roughly $13.6 billion in 2021. There was a decline in equity to approximately $11.7 billion in 2022, which could correlate with the reported net losses in the recent periods.

Reported Return on Equity (ROE)

Reported ROE followed the net income trend closely, rising from 22.28% in 2017 to a high of 28.82% in 2018, then slightly decreasing but remaining strong at 27.38% in 2019. The ROE turned negative in 2020 (-0.1%), reflecting the net loss, improved to 14.69% in 2021, but again dipped slightly negative (-0.34%) in 2022.

Adjusted Net Income

Adjusted net income, which excludes certain items to provide a normalized view, increased steadily from about $1.7 billion in 2017 to $3.73 billion in 2019. It then deteriorated sharply to a loss of approximately $1.04 billion in 2020. A recovery occurred in 2021 reaching $2.28 billion, followed by a significant decrease to only $120.5 million in 2022, indicating ongoing challenges despite adjustments.

Adjusted Total Stockholders’ Equity

Adjusted equity values were higher than reported equity throughout the period, increasing from $8.02 billion in 2017 to peak at $11.68 billion in 2019. This figure declined to $10.2 billion in 2020, rebounded to $12 billion in 2021, and fell again to $10.3 billion in 2022. The pattern reflects equity volatility consistent with net income fluctuations.

Adjusted Return on Equity (ROE)

The adjusted ROE showed a similar trend to reported ROE but with larger magnitudes. It started at 21.19% in 2017, climbed to 31.94% in 2019, then plunged to a negative 10.18% in 2020. The adjusted ROE improved to 18.96% in 2021 but sharply dropped to a barely positive 1.16% in 2022, demonstrating diminished profitability after adjustments.

Overall, the data suggests that the company experienced strong growth and profitability from 2017 through 2019, followed by a pronounced downturn in 2020 likely due to extraordinary or adverse conditions. A partial recovery in 2021 was observed, but profitability and equity levels declined again in 2022. The considerable swings in both reported and adjusted figures emphasize volatility and signal potential underlying challenges impacting financial stability and returns during the latter years.

Net Income (Loss) Attributable to CBI

Net income exhibited a substantial increase from 1,535,100 thousand US$ in 2017 to a peak of 3,435,900 thousand US$ in 2019. However, it turned negative in 2020 with a loss of 11,800 thousand US$, recovering to a positive 1,998,000 thousand US$ in 2021 before again registering a loss of 40,400 thousand US$ in 2022. This pattern indicates volatility in profitability with significant fluctuations and occasional losses in recent years.

Total Assets

Total assets grew steadily from 18,602,400 thousand US$ in 2017 to a high of 29,231,500 thousand US$ in 2019, followed by a consistent decline to 25,855,800 thousand US$ in 2022. This trend suggests that asset growth peaked in 2019 and has been contracting since, possibly reflecting asset disposals or depreciation exceeding acquisitions.

Reported Return on Assets (ROA)

The reported ROA rose from 8.25% in 2017 to 11.75% in 2019, indicating improving asset efficiency during that period. It then sharply declined to near zero (-0.04%) in 2020, improved to 7.37% in 2021, and fell again to a negative return of -0.16% in 2022. This volatility corresponds closely to the fluctuations seen in net income and highlights challenges in maintaining consistent profitability.

Adjusted Net Income

Adjusted net income increased from 1,699,200 thousand US$ in 2017 to a peak of 3,731,400 thousand US$ in 2019, mirroring the trends seen in reported net income. However, a sharp turnaround resulted in a significant adjusted loss of 1,038,900 thousand US$ in 2020. The metric recovered to 2,276,800 thousand US$ in 2021 before dramatically decreasing to 120,500 thousand US$ in 2022. This reflects substantial non-recurring impacts or adjustments influencing reported profitability.

Adjusted Total Assets

Adjusted total assets followed a growth trajectory from 18,996,511 thousand US$ in 2017 to 27,498,624 thousand US$ in 2019, then declined steadily to 23,504,300 thousand US$ in 2022. This pattern supports the observations for reported total assets, indicating asset contraction after the 2019 peak in both reported and adjusted terms.

Adjusted Return on Assets (ROA)

Adjusted ROA demonstrated an upward trend from 8.94% in 2017 to 13.57% in 2019, signaling enhanced asset profitability. The ratio then turned highly negative to -4.21% in 2020, rebounded to 9.25% in 2021, and sharply declined to 0.51% in 2022. This volatility illustrates significantly fluctuating operational profitability when non-recurring items are excluded.