Analysis of Solvency Ratios
Solvency ratios also known as long-term debt ratios measure a company ability to meet long-term obligations.
Solvency Ratios (Summary)
Debt Ratios
Coverage Ratios
Constellation Brands Inc., solvency ratios
Based on: 10-K (reporting date: 2022-02-28), 10-K (reporting date: 2021-02-28), 10-K (reporting date: 2020-02-29), 10-K (reporting date: 2019-02-28), 10-K (reporting date: 2018-02-28), 10-K (reporting date: 2017-02-28).
A comprehensive review of solvency metrics from February 2017 to February 2022 indicates a consistent trend of deleveraging through the first five years of the period, followed by a marginal increase in leverage in the final year. This trajectory suggests a strategic reduction in the reliance on debt relative to equity and assets, although recent coverage ratios exhibit significant volatility.
- Capital Structure and Leverage Trends
- The Debt to Equity ratio decreased steadily from 1.34 in 2017 to a low of 0.77 in 2021, before increasing to 0.89 in 2022. A similar pattern is observed in the Debt to Capital ratio, which moved from 0.57 in 2017 to 0.43 in 2021, subsequently rising to 0.47 in 2022. The inclusion of operating lease liabilities marginally increases these ratios across all periods but does not alter the overall downward trajectory observed between 2017 and 2021.
- Asset Financing and Financial Leverage
- Debt to Assets showed a gradual decline from 0.50 in 2017 to a minimum of 0.39 in 2021, indicating that a smaller proportion of total assets was financed via debt. Financial leverage mirrored this movement, contracting from 2.70 in 2017 to 1.99 in 2021, before experiencing a reversal to 2.20 in 2022.
- Debt Service Coverage Capacity
- Interest coverage and fixed charge coverage exhibited high volatility. The Interest Coverage ratio peaked at 12.29 in 2019 but declined sharply to -1.20 in 2020, suggesting a period where operating income was insufficient to cover interest expenses. While a strong recovery to 7.59 was noted in 2021, the ratio fell again to 1.87 in 2022. Fixed charge coverage followed an identical pattern, moving from a peak of 10.63 in 2019 to -0.79 in 2020, and ending at 1.70 in 2022, indicating a reduced safety margin for meeting fixed obligations in the most recent period.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
Debt to Equity
Constellation Brands Inc., debt to equity calculation, comparison to benchmarks
| Feb 28, 2022 | Feb 28, 2021 | Feb 29, 2020 | Feb 28, 2019 | Feb 28, 2018 | Feb 28, 2017 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Short-term borrowings | 323,000) | —) | 238,900) | 791,500) | 746,800) | 606,500) | |
| Current maturities of long-term debt | 605,300) | 29,200) | 734,900) | 1,065,200) | 22,300) | 910,900) | |
| Long-term debt, less current maturities | 9,488,200) | 10,413,100) | 11,210,800) | 11,759,800) | 9,417,600) | 7,720,700) | |
| Total debt | 10,416,500) | 10,442,300) | 12,184,600) | 13,616,500) | 10,186,700) | 9,238,100) | |
| Total CBI stockholders’ equity | 11,731,900) | 13,598,900) | 12,131,800) | 12,551,000) | 8,046,100) | 6,891,200) | |
| Solvency Ratio | |||||||
| Debt to equity1 | 0.89 | 0.77 | 1.00 | 1.08 | 1.27 | 1.34 | |
| Benchmarks | |||||||
| Debt to Equity, Competitors2 | |||||||
| Coca-Cola Co. | 1.62 | 1.86 | — | — | — | — | |
| Mondelēz International Inc. | 0.85 | 0.69 | — | — | — | — | |
| PepsiCo Inc. | 2.28 | 2.51 | — | — | — | — | |
| Philip Morris International Inc. | — | — | — | — | — | — | |
| Debt to Equity, Sector | |||||||
| Food, Beverage & Tobacco | 2.44 | 2.28 | — | — | — | — | |
| Debt to Equity, Industry | |||||||
| Consumer Staples | 1.08 | 1.07 | — | — | — | — | |
Based on: 10-K (reporting date: 2022-02-28), 10-K (reporting date: 2021-02-28), 10-K (reporting date: 2020-02-29), 10-K (reporting date: 2019-02-28), 10-K (reporting date: 2018-02-28), 10-K (reporting date: 2017-02-28).
1 2022 Calculation
Debt to equity = Total debt ÷ Total CBI stockholders’ equity
= 10,416,500 ÷ 11,731,900 = 0.89
2 Click competitor name to see calculations.
A comprehensive analysis of the solvency metrics from February 2017 to February 2022 reveals a general trend of deleveraging and an improved capital structure, characterized by a sustained reduction in the reliance on borrowed funds relative to shareholder equity.
- Debt to Equity Ratio Analysis
- The debt to equity ratio exhibited a consistent downward trajectory from 2017 to 2021, falling from 1.34 to a period low of 0.77. This trend indicates a strengthening of the solvency position and a reduction in financial risk. A slight reversal was observed in February 2022, where the ratio increased to 0.89, though it remained significantly lower than the levels recorded between 2017 and 2020.
- Total Debt Obligations
- Total debt obligations peaked in February 2019 at 13,616,500 thousand US dollars. Following this peak, a period of steady debt reduction occurred over the subsequent three years, with total debt declining to 10,416,500 thousand US dollars by February 2022. This represents a decrease of approximately 23.5% from the 2019 maximum.
- Stockholders' Equity Growth
- Total stockholders' equity saw substantial growth between 2017 and 2021, increasing from 6,891,200 thousand US dollars to 13,598,900 thousand US dollars. Although equity contracted to 11,731,900 thousand US dollars in February 2022, the equity base remained significantly larger than it was at the beginning of the analyzed period, which served as a primary driver for the overall improvement in the debt to equity ratio.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
Debt to Equity (including Operating Lease Liability)
Constellation Brands Inc., debt to equity (including operating lease liability) calculation, comparison to benchmarks
| Feb 28, 2022 | Feb 28, 2021 | Feb 29, 2020 | Feb 28, 2019 | Feb 28, 2018 | Feb 28, 2017 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Short-term borrowings | 323,000) | —) | 238,900) | 791,500) | 746,800) | 606,500) | |
| Current maturities of long-term debt | 605,300) | 29,200) | 734,900) | 1,065,200) | 22,300) | 910,900) | |
| Long-term debt, less current maturities | 9,488,200) | 10,413,100) | 11,210,800) | 11,759,800) | 9,417,600) | 7,720,700) | |
| Total debt | 10,416,500) | 10,442,300) | 12,184,600) | 13,616,500) | 10,186,700) | 9,238,100) | |
| Current operating lease liability | 80,400) | 68,800) | 76,600) | —) | —) | —) | |
| Noncurrent operating lease liability | 457,300) | 471,100) | 483,600) | —) | —) | —) | |
| Total debt (including operating lease liability) | 10,954,200) | 10,982,200) | 12,744,800) | 13,616,500) | 10,186,700) | 9,238,100) | |
| Total CBI stockholders’ equity | 11,731,900) | 13,598,900) | 12,131,800) | 12,551,000) | 8,046,100) | 6,891,200) | |
| Solvency Ratio | |||||||
| Debt to equity (including operating lease liability)1 | 0.93 | 0.81 | 1.05 | 1.08 | 1.27 | 1.34 | |
| Benchmarks | |||||||
| Debt to Equity (including Operating Lease Liability), Competitors2 | |||||||
| Coca-Cola Co. | 1.68 | 1.92 | — | — | — | — | |
| Mondelēz International Inc. | 0.88 | 0.71 | — | — | — | — | |
| PepsiCo Inc. | 2.42 | 2.64 | — | — | — | — | |
| Philip Morris International Inc. | — | — | — | — | — | — | |
| Debt to Equity (including Operating Lease Liability), Sector | |||||||
| Food, Beverage & Tobacco | 2.53 | 2.36 | — | — | — | — | |
| Debt to Equity (including Operating Lease Liability), Industry | |||||||
| Consumer Staples | 1.20 | 1.19 | — | — | — | — | |
Based on: 10-K (reporting date: 2022-02-28), 10-K (reporting date: 2021-02-28), 10-K (reporting date: 2020-02-29), 10-K (reporting date: 2019-02-28), 10-K (reporting date: 2018-02-28), 10-K (reporting date: 2017-02-28).
1 2022 Calculation
Debt to equity (including operating lease liability) = Total debt (including operating lease liability) ÷ Total CBI stockholders’ equity
= 10,954,200 ÷ 11,731,900 = 0.93
2 Click competitor name to see calculations.
Between February 2017 and February 2022, a general trend of improving solvency is observed, characterized by a sustained reduction in the leverage ratio despite fluctuations in total debt and equity levels.
- Debt to Equity Ratio Trend
- The ratio exhibited a consistent downward trajectory from 1.34 in 2017 to a minimum of 0.81 in 2021. This decline indicates a shift toward a more equity-heavy capital structure, reducing the reliance on borrowed funds relative to shareholder investment. A moderate increase to 0.93 occurred in 2022, though the ratio remains significantly lower than the 2017 baseline.
- Total Debt Dynamics
- Total debt, including operating lease liabilities, increased from 9.24 billion USD in 2017 to a peak of 13.62 billion USD in 2019. Following this peak, debt levels decreased steadily, stabilizing at approximately 10.95 billion USD by February 2022. This pattern suggests a period of capital expansion followed by a phase of debt reduction or stabilization.
- Stockholders' Equity Evolution
- Equity showed strong growth over the analyzed period, rising from 6.89 billion USD in 2017 to a peak of 13.60 billion USD in 2021. The substantial increase in equity, particularly between 2018 and 2019, served as a primary driver for the reduction in the debt-to-equity ratio. A decrease to 11.73 billion USD was noted in 2022, which contributed to the slight increase in the leverage ratio for that period.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
Debt to Capital
Constellation Brands Inc., debt to capital calculation, comparison to benchmarks
| Feb 28, 2022 | Feb 28, 2021 | Feb 29, 2020 | Feb 28, 2019 | Feb 28, 2018 | Feb 28, 2017 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Short-term borrowings | 323,000) | —) | 238,900) | 791,500) | 746,800) | 606,500) | |
| Current maturities of long-term debt | 605,300) | 29,200) | 734,900) | 1,065,200) | 22,300) | 910,900) | |
| Long-term debt, less current maturities | 9,488,200) | 10,413,100) | 11,210,800) | 11,759,800) | 9,417,600) | 7,720,700) | |
| Total debt | 10,416,500) | 10,442,300) | 12,184,600) | 13,616,500) | 10,186,700) | 9,238,100) | |
| Total CBI stockholders’ equity | 11,731,900) | 13,598,900) | 12,131,800) | 12,551,000) | 8,046,100) | 6,891,200) | |
| Total capital | 22,148,400) | 24,041,200) | 24,316,400) | 26,167,500) | 18,232,800) | 16,129,300) | |
| Solvency Ratio | |||||||
| Debt to capital1 | 0.47 | 0.43 | 0.50 | 0.52 | 0.56 | 0.57 | |
| Benchmarks | |||||||
| Debt to Capital, Competitors2 | |||||||
| Coca-Cola Co. | 0.62 | 0.65 | — | — | — | — | |
| Mondelēz International Inc. | 0.46 | 0.41 | — | — | — | — | |
| PepsiCo Inc. | 0.69 | 0.72 | — | — | — | — | |
| Philip Morris International Inc. | 1.26 | 1.57 | — | — | — | — | |
| Debt to Capital, Sector | |||||||
| Food, Beverage & Tobacco | 0.71 | 0.70 | — | — | — | — | |
| Debt to Capital, Industry | |||||||
| Consumer Staples | 0.52 | 0.52 | — | — | — | — | |
Based on: 10-K (reporting date: 2022-02-28), 10-K (reporting date: 2021-02-28), 10-K (reporting date: 2020-02-29), 10-K (reporting date: 2019-02-28), 10-K (reporting date: 2018-02-28), 10-K (reporting date: 2017-02-28).
1 2022 Calculation
Debt to capital = Total debt ÷ Total capital
= 10,416,500 ÷ 22,148,400 = 0.47
2 Click competitor name to see calculations.
The analysis of solvency indicators from February 2017 through February 2022 reveals a general improvement in the debt-to-capital structure, characterized by a steady reduction in the reliance on borrowed funds relative to total capital for the majority of the period.
- Debt to Capital Ratio Trend
- A consistent downward trend is observed from 2017 to 2021, with the ratio declining from 0.57 to a period low of 0.43. This indicates a strengthening of the solvency position and a reduction in financial leverage. A slight reversal occurred in February 2022, where the ratio increased to 0.47, suggesting a marginal shift in the capital mix.
- Total Debt Dynamics
- Total debt experienced a significant escalation between 2018 and 2019, peaking at 13.6 billion USD. Following this peak, a period of deleveraging ensued, with total debt decreasing annually to reach 10.4 billion USD by February 2022. This represents a substantial reduction in absolute liabilities from the 2019 high.
- Total Capital Fluctuations
- Total capital expanded rapidly between 2018 and 2019, increasing from 18.2 billion USD to 26.2 billion USD. While total capital levels subsequently contracted to 22.1 billion USD by February 2022, the magnitude of capital growth in 2019 outpaced the increase in debt during the same window, contributing to the initial decline in the debt-to-capital ratio.
The overall trajectory indicates that the organization successfully reduced its leverage profile over the five-year span. Despite the slight uptick in the ratio in the final year, the solvency position remains more favorable than the levels recorded at the start of the analyzed period.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
Debt to Capital (including Operating Lease Liability)
Constellation Brands Inc., debt to capital (including operating lease liability) calculation, comparison to benchmarks
| Feb 28, 2022 | Feb 28, 2021 | Feb 29, 2020 | Feb 28, 2019 | Feb 28, 2018 | Feb 28, 2017 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Short-term borrowings | 323,000) | —) | 238,900) | 791,500) | 746,800) | 606,500) | |
| Current maturities of long-term debt | 605,300) | 29,200) | 734,900) | 1,065,200) | 22,300) | 910,900) | |
| Long-term debt, less current maturities | 9,488,200) | 10,413,100) | 11,210,800) | 11,759,800) | 9,417,600) | 7,720,700) | |
| Total debt | 10,416,500) | 10,442,300) | 12,184,600) | 13,616,500) | 10,186,700) | 9,238,100) | |
| Current operating lease liability | 80,400) | 68,800) | 76,600) | —) | —) | —) | |
| Noncurrent operating lease liability | 457,300) | 471,100) | 483,600) | —) | —) | —) | |
| Total debt (including operating lease liability) | 10,954,200) | 10,982,200) | 12,744,800) | 13,616,500) | 10,186,700) | 9,238,100) | |
| Total CBI stockholders’ equity | 11,731,900) | 13,598,900) | 12,131,800) | 12,551,000) | 8,046,100) | 6,891,200) | |
| Total capital (including operating lease liability) | 22,686,100) | 24,581,100) | 24,876,600) | 26,167,500) | 18,232,800) | 16,129,300) | |
| Solvency Ratio | |||||||
| Debt to capital (including operating lease liability)1 | 0.48 | 0.45 | 0.51 | 0.52 | 0.56 | 0.57 | |
| Benchmarks | |||||||
| Debt to Capital (including Operating Lease Liability), Competitors2 | |||||||
| Coca-Cola Co. | 0.63 | 0.66 | — | — | — | — | |
| Mondelēz International Inc. | 0.47 | 0.42 | — | — | — | — | |
| PepsiCo Inc. | 0.71 | 0.73 | — | — | — | — | |
| Philip Morris International Inc. | 1.26 | 1.55 | — | — | — | — | |
| Debt to Capital (including Operating Lease Liability), Sector | |||||||
| Food, Beverage & Tobacco | 0.72 | 0.70 | — | — | — | — | |
| Debt to Capital (including Operating Lease Liability), Industry | |||||||
| Consumer Staples | 0.54 | 0.54 | — | — | — | — | |
Based on: 10-K (reporting date: 2022-02-28), 10-K (reporting date: 2021-02-28), 10-K (reporting date: 2020-02-29), 10-K (reporting date: 2019-02-28), 10-K (reporting date: 2018-02-28), 10-K (reporting date: 2017-02-28).
1 2022 Calculation
Debt to capital (including operating lease liability) = Total debt (including operating lease liability) ÷ Total capital (including operating lease liability)
= 10,954,200 ÷ 22,686,100 = 0.48
2 Click competitor name to see calculations.
A comprehensive review of the solvency profile between February 2017 and February 2022 reveals a general trend toward reduced financial leverage, despite a period of significant capital expansion. The overall solvency position strengthened as the reliance on debt relative to total capital diminished over the six-year period.
- Total Debt and Capital Dynamics
- Total debt, including operating lease liabilities, exhibited a period of growth from US$ 9.24 billion in 2017 to a peak of US$ 13.62 billion in 2019. Following this peak, a consistent deleveraging trend occurred, with debt levels receding to approximately US$ 10.95 billion by February 2022. Total capital followed a similar trajectory, expanding sharply from US$ 16.13 billion in 2017 to a peak of US$ 26.17 billion in 2019, before gradually contracting to US$ 22.69 billion in 2022.
- Debt to Capital Ratio Analysis
- The debt to capital ratio demonstrated a consistent downward trajectory for the majority of the period, declining from 0.57 in 2017 to a low of 0.45 in 2021. A notable observation occurs in 2019, where the ratio decreased to 0.52 despite a substantial absolute increase in total debt; this indicates that the growth in total capital outpaced the accumulation of debt during that fiscal year.
- The lowest leverage point was reached in February 2021 at 0.45, coinciding with a significant reduction in total debt. However, a slight reversal is observed in 2022, where the ratio rose to 0.48. This uptick was driven by a continued contraction in total capital while total debt remained relatively stagnant.
- Solvency Outlook
- The progression of the debt to capital ratio suggests an intentional shift toward a more conservative capital structure. The reduction in the ratio from 0.57 to 0.48 indicates an improved capacity to absorb financial shocks and a lower overall risk profile regarding long-term obligations.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
Debt to Assets
Constellation Brands Inc., debt to assets calculation, comparison to benchmarks
| Feb 28, 2022 | Feb 28, 2021 | Feb 29, 2020 | Feb 28, 2019 | Feb 28, 2018 | Feb 28, 2017 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Short-term borrowings | 323,000) | —) | 238,900) | 791,500) | 746,800) | 606,500) | |
| Current maturities of long-term debt | 605,300) | 29,200) | 734,900) | 1,065,200) | 22,300) | 910,900) | |
| Long-term debt, less current maturities | 9,488,200) | 10,413,100) | 11,210,800) | 11,759,800) | 9,417,600) | 7,720,700) | |
| Total debt | 10,416,500) | 10,442,300) | 12,184,600) | 13,616,500) | 10,186,700) | 9,238,100) | |
| Total assets | 25,855,800) | 27,104,800) | 27,323,200) | 29,231,500) | 20,538,700) | 18,602,400) | |
| Solvency Ratio | |||||||
| Debt to assets1 | 0.40 | 0.39 | 0.45 | 0.47 | 0.50 | 0.50 | |
| Benchmarks | |||||||
| Debt to Assets, Competitors2 | |||||||
| Coca-Cola Co. | 0.42 | 0.45 | — | — | — | — | |
| Mondelēz International Inc. | 0.32 | 0.29 | — | — | — | — | |
| PepsiCo Inc. | 0.42 | 0.44 | — | — | — | — | |
| Philip Morris International Inc. | 0.70 | 0.67 | — | — | — | — | |
| Debt to Assets, Sector | |||||||
| Food, Beverage & Tobacco | 0.45 | 0.44 | — | — | — | — | |
| Debt to Assets, Industry | |||||||
| Consumer Staples | 0.30 | 0.30 | — | — | — | — | |
Based on: 10-K (reporting date: 2022-02-28), 10-K (reporting date: 2021-02-28), 10-K (reporting date: 2020-02-29), 10-K (reporting date: 2019-02-28), 10-K (reporting date: 2018-02-28), 10-K (reporting date: 2017-02-28).
1 2022 Calculation
Debt to assets = Total debt ÷ Total assets
= 10,416,500 ÷ 25,855,800 = 0.40
2 Click competitor name to see calculations.
The solvency position exhibits a general trend of deleveraging relative to the asset base over the six-year period ending February 28, 2022. While the solvency profile remained static during the first two years, a subsequent downward trend in the debt-to-assets ratio indicates a reduction in financial leverage and an improvement in the proportion of assets funded by equity.
- Debt to Assets Ratio
- The ratio remained constant at 0.50 between February 2017 and February 2018, before entering a period of steady decline. The ratio reached its lowest point of 0.39 in February 2021, followed by a marginal increase to 0.40 in February 2022. This overall trajectory suggests a strategic shift toward a less leveraged balance sheet.
- Total Debt Trends
- Total debt levels increased from 9.2 billion USD in 2017 to a peak of 13.6 billion USD in February 2019. Following this peak, a consistent reduction in total debt was observed, decreasing to 10.4 billion USD by February 2021 and remaining nearly flat through February 2022.
- Total Asset Variations
- Total assets grew significantly from 18.6 billion USD in 2017 to a peak of 29.2 billion USD in February 2019. This surge in assets played a critical role in lowering the debt-to-assets ratio during that period. From 2019 onward, the asset base experienced a gradual contraction, ending at 25.8 billion USD in February 2022.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
Debt to Assets (including Operating Lease Liability)
Constellation Brands Inc., debt to assets (including operating lease liability) calculation, comparison to benchmarks
| Feb 28, 2022 | Feb 28, 2021 | Feb 29, 2020 | Feb 28, 2019 | Feb 28, 2018 | Feb 28, 2017 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Short-term borrowings | 323,000) | —) | 238,900) | 791,500) | 746,800) | 606,500) | |
| Current maturities of long-term debt | 605,300) | 29,200) | 734,900) | 1,065,200) | 22,300) | 910,900) | |
| Long-term debt, less current maturities | 9,488,200) | 10,413,100) | 11,210,800) | 11,759,800) | 9,417,600) | 7,720,700) | |
| Total debt | 10,416,500) | 10,442,300) | 12,184,600) | 13,616,500) | 10,186,700) | 9,238,100) | |
| Current operating lease liability | 80,400) | 68,800) | 76,600) | —) | —) | —) | |
| Noncurrent operating lease liability | 457,300) | 471,100) | 483,600) | —) | —) | —) | |
| Total debt (including operating lease liability) | 10,954,200) | 10,982,200) | 12,744,800) | 13,616,500) | 10,186,700) | 9,238,100) | |
| Total assets | 25,855,800) | 27,104,800) | 27,323,200) | 29,231,500) | 20,538,700) | 18,602,400) | |
| Solvency Ratio | |||||||
| Debt to assets (including operating lease liability)1 | 0.42 | 0.41 | 0.47 | 0.47 | 0.50 | 0.50 | |
| Benchmarks | |||||||
| Debt to Assets (including Operating Lease Liability), Competitors2 | |||||||
| Coca-Cola Co. | 0.44 | 0.47 | — | — | — | — | |
| Mondelēz International Inc. | 0.33 | 0.30 | — | — | — | — | |
| PepsiCo Inc. | 0.45 | 0.46 | — | — | — | — | |
| Philip Morris International Inc. | 0.71 | 0.69 | — | — | — | — | |
| Debt to Assets (including Operating Lease Liability), Sector | |||||||
| Food, Beverage & Tobacco | 0.47 | 0.46 | — | — | — | — | |
| Debt to Assets (including Operating Lease Liability), Industry | |||||||
| Consumer Staples | 0.33 | 0.33 | — | — | — | — | |
Based on: 10-K (reporting date: 2022-02-28), 10-K (reporting date: 2021-02-28), 10-K (reporting date: 2020-02-29), 10-K (reporting date: 2019-02-28), 10-K (reporting date: 2018-02-28), 10-K (reporting date: 2017-02-28).
1 2022 Calculation
Debt to assets (including operating lease liability) = Total debt (including operating lease liability) ÷ Total assets
= 10,954,200 ÷ 25,855,800 = 0.42
2 Click competitor name to see calculations.
The financial trajectory between February 2017 and February 2022 indicates a strategic reduction in leverage and an improvement in the overall solvency position. While both debt and assets experienced significant fluctuations, the relative proportion of debt to assets has trended downward over the six-year period.
- Total Debt Dynamics
- Total debt, inclusive of operating lease liabilities, grew steadily from US$ 9.24 billion in 2017 to a peak of US$ 13.62 billion in February 2019. Following this peak, a consistent deleveraging trend was observed, with total debt decreasing to US$ 10.95 billion by February 2022. This suggests a period of aggressive borrowing followed by a sustained effort to reduce total liabilities.
- Asset Base Evolution
- Total assets showed a marked increase in 2019, jumping from US$ 20.54 billion to US$ 29.23 billion, indicating a substantial expansion of the balance sheet. This was followed by a gradual decline in total assets over the subsequent three years, ending at US$ 25.86 billion in February 2022. The magnitude of the 2019 increase suggests a significant acquisition or capital investment event.
- Debt to Assets Ratio Interpretation
- The debt to assets ratio remained stable at 0.50 during the first two years of the period. Beginning in 2019, the ratio entered a downward trend, decreasing to 0.47 and reaching a low of 0.41 in February 2021, before a slight uptick to 0.42 in February 2022. The overall decrease from 0.50 to 0.42 demonstrates that a lower percentage of assets is being financed through debt, reflecting an enhanced solvency profile and reduced financial risk.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
Financial Leverage
Constellation Brands Inc., financial leverage calculation, comparison to benchmarks
| Feb 28, 2022 | Feb 28, 2021 | Feb 29, 2020 | Feb 28, 2019 | Feb 28, 2018 | Feb 28, 2017 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Total assets | 25,855,800) | 27,104,800) | 27,323,200) | 29,231,500) | 20,538,700) | 18,602,400) | |
| Total CBI stockholders’ equity | 11,731,900) | 13,598,900) | 12,131,800) | 12,551,000) | 8,046,100) | 6,891,200) | |
| Solvency Ratio | |||||||
| Financial leverage1 | 2.20 | 1.99 | 2.25 | 2.33 | 2.55 | 2.70 | |
| Benchmarks | |||||||
| Financial Leverage, Competitors2 | |||||||
| Coca-Cola Co. | 3.85 | 4.10 | — | — | — | — | |
| Mondelēz International Inc. | 2.65 | 2.37 | — | — | — | — | |
| PepsiCo Inc. | 5.38 | 5.76 | — | — | — | — | |
| Philip Morris International Inc. | — | — | — | — | — | — | |
| Financial Leverage, Sector | |||||||
| Food, Beverage & Tobacco | 5.37 | 5.16 | — | — | — | — | |
| Financial Leverage, Industry | |||||||
| Consumer Staples | 3.59 | 3.59 | — | — | — | — | |
Based on: 10-K (reporting date: 2022-02-28), 10-K (reporting date: 2021-02-28), 10-K (reporting date: 2020-02-29), 10-K (reporting date: 2019-02-28), 10-K (reporting date: 2018-02-28), 10-K (reporting date: 2017-02-28).
1 2022 Calculation
Financial leverage = Total assets ÷ Total CBI stockholders’ equity
= 25,855,800 ÷ 11,731,900 = 2.20
2 Click competitor name to see calculations.
Between February 2017 and February 2022, a general trend of deleveraging is observed, characterized by a progressive reduction in the financial leverage ratio despite fluctuations in the total asset base.
- Asset and Equity Dynamics
- Total assets experienced a significant expansion from US$ 18.6 billion in 2017 to a peak of US$ 29.2 billion in 2019. This growth was mirrored by a substantial increase in total stockholders' equity, which rose from US$ 6.89 billion in 2017 to US$ 12.55 billion in 2019. Following this peak, total assets entered a period of gradual contraction, ending at US$ 25.86 billion in 2022, while equity fluctuated, ultimately closing the period at US$ 11.73 billion.
- Financial Leverage Analysis
- The financial leverage ratio exhibited a steady downward trajectory from 2017 through 2021, declining from 2.70 to a period low of 1.99. This movement indicates a strategic reduction in the proportion of debt used to finance assets, enhancing the overall solvency profile. A moderate reversal occurred in 2022, with the ratio increasing to 2.20, which is attributable to the reduction in total stockholders' equity relative to the total asset base during that fiscal year.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
Interest Coverage
Constellation Brands Inc., interest coverage calculation, comparison to benchmarks
| Feb 28, 2022 | Feb 28, 2021 | Feb 29, 2020 | Feb 28, 2019 | Feb 28, 2018 | Feb 28, 2017 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Net income (loss) attributable to CBI | (40,400) | 1,998,000) | (11,800) | 3,435,900) | 2,318,900) | 1,535,100) | |
| Add: Net income attributable to noncontrolling interest | 41,400) | 33,800) | 33,200) | 23,200) | 11,900) | 4,100) | |
| Add: Income tax expense | 309,400) | 511,100) | (966,600) | 685,900) | 11,900) | 554,200) | |
| Add: Interest expense | 356,400) | 385,700) | 428,700) | 367,100) | 332,000) | 333,300) | |
| Earnings before interest and tax (EBIT) | 666,800) | 2,928,600) | (516,500) | 4,512,100) | 2,674,700) | 2,426,700) | |
| Solvency Ratio | |||||||
| Interest coverage1 | 1.87 | 7.59 | -1.20 | 12.29 | 8.06 | 7.28 | |
| Benchmarks | |||||||
| Interest Coverage, Competitors2 | |||||||
| Coca-Cola Co. | 14.25 | 8.78 | — | — | — | — | |
| Mondelēz International Inc. | 9.39 | 16.08 | — | — | — | — | |
| PepsiCo Inc. | 10.57 | 5.94 | — | — | — | — | |
| Philip Morris International Inc. | 16.33 | 17.80 | — | — | — | — | |
| Interest Coverage, Sector | |||||||
| Food, Beverage & Tobacco | 12.81 | 9.56 | — | — | — | — | |
| Interest Coverage, Industry | |||||||
| Consumer Staples | 15.69 | 11.46 | — | — | — | — | |
Based on: 10-K (reporting date: 2022-02-28), 10-K (reporting date: 2021-02-28), 10-K (reporting date: 2020-02-29), 10-K (reporting date: 2019-02-28), 10-K (reporting date: 2018-02-28), 10-K (reporting date: 2017-02-28).
1 2022 Calculation
Interest coverage = EBIT ÷ Interest expense
= 666,800 ÷ 356,400 = 1.87
2 Click competitor name to see calculations.
The analysis of interest coverage reveals a period of significant volatility between February 2017 and February 2022, characterized by an initial strengthening of solvency followed by a severe contraction and a subsequent unstable recovery.
- Interest Coverage Ratio Dynamics
- A strong upward trend was observed from 2017 to 2019, with the ratio rising from 7.28 to a peak of 12.29, indicating a robust capacity to service debt. This was followed by a critical decline in 2020, where the ratio fell to -1.20, signifying that operating earnings were insufficient to cover interest obligations. Although a recovery to 7.59 occurred in 2021, the ratio declined sharply again to 1.87 by February 2022, suggesting a weakened solvency position.
- Earnings Before Interest and Tax (EBIT) Trends
- EBIT exhibited substantial fluctuations over the six-year period. After growing from US$ 2.43 billion in 2017 to a high of US$ 4.51 billion in 2019, earnings plummeted to a deficit of US$ 516.5 million in 2020. A partial recovery was noted in 2021 with earnings of US$ 2.93 billion, but a significant reduction followed in 2022, with EBIT falling to US$ 666.8 million.
- Interest Expense Analysis
- Interest expenses remained relatively stable compared to the volatility of EBIT, ranging from a low of US$ 332 million in 2018 to a peak of US$ 428.7 million in 2020. The alignment of peak interest expenses with the lowest EBIT in 2020 intensified the negative impact on the interest coverage ratio during that fiscal year.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
Fixed Charge Coverage
Constellation Brands Inc., fixed charge coverage calculation, comparison to benchmarks
| Feb 28, 2022 | Feb 28, 2021 | Feb 29, 2020 | Feb 28, 2019 | Feb 28, 2018 | Feb 28, 2017 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Net income (loss) attributable to CBI | (40,400) | 1,998,000) | (11,800) | 3,435,900) | 2,318,900) | 1,535,100) | |
| Add: Net income attributable to noncontrolling interest | 41,400) | 33,800) | 33,200) | 23,200) | 11,900) | 4,100) | |
| Add: Income tax expense | 309,400) | 511,100) | (966,600) | 685,900) | 11,900) | 554,200) | |
| Add: Interest expense | 356,400) | 385,700) | 428,700) | 367,100) | 332,000) | 333,300) | |
| Earnings before interest and tax (EBIT) | 666,800) | 2,928,600) | (516,500) | 4,512,100) | 2,674,700) | 2,426,700) | |
| Add: Operating lease cost | 89,500) | 93,400) | 98,900) | 63,500) | 59,100) | 59,200) | |
| Earnings before fixed charges and tax | 756,300) | 3,022,000) | (417,600) | 4,575,600) | 2,733,800) | 2,485,900) | |
| Interest expense | 356,400) | 385,700) | 428,700) | 367,100) | 332,000) | 333,300) | |
| Operating lease cost | 89,500) | 93,400) | 98,900) | 63,500) | 59,100) | 59,200) | |
| Fixed charges | 445,900) | 479,100) | 527,600) | 430,600) | 391,100) | 392,500) | |
| Solvency Ratio | |||||||
| Fixed charge coverage1 | 1.70 | 6.31 | -0.79 | 10.63 | 6.99 | 6.33 | |
| Benchmarks | |||||||
| Fixed Charge Coverage, Competitors2 | |||||||
| Coca-Cola Co. | 10.14 | 7.41 | — | — | — | — | |
| Mondelēz International Inc. | 6.60 | 10.28 | — | — | — | — | |
| PepsiCo Inc. | 7.28 | 4.85 | — | — | — | — | |
| Philip Morris International Inc. | 12.59 | 13.43 | — | — | — | — | |
| Fixed Charge Coverage, Sector | |||||||
| Food, Beverage & Tobacco | 9.14 | 7.60 | — | — | — | — | |
| Fixed Charge Coverage, Industry | |||||||
| Consumer Staples | 9.12 | 7.50 | — | — | — | — | |
Based on: 10-K (reporting date: 2022-02-28), 10-K (reporting date: 2021-02-28), 10-K (reporting date: 2020-02-29), 10-K (reporting date: 2019-02-28), 10-K (reporting date: 2018-02-28), 10-K (reporting date: 2017-02-28).
1 2022 Calculation
Fixed charge coverage = Earnings before fixed charges and tax ÷ Fixed charges
= 756,300 ÷ 445,900 = 1.70
2 Click competitor name to see calculations.
Analysis of solvency reveals significant volatility in fixed charge coverage between 2017 and 2022, characterized by a period of strong growth followed by acute instability and a subsequent partial recovery.
- Earnings Performance and Coverage Trends
- Between 2017 and 2019, a strong upward trend in earnings before fixed charges and tax was observed, peaking at US$ 4.58 billion in February 2019. This growth resulted in a corresponding increase in the fixed charge coverage ratio, which reached a peak of 10.63, indicating a high margin of safety for meeting fixed obligations.
- Solvency Crisis and Recovery
- A severe contraction occurred in February 2020, where earnings became negative (US$ -417.6 million), leading to a negative coverage ratio of -0.79. During this period, fixed charges reached their highest level of US$ 527.6 million, exacerbating the solvency strain. A sharp recovery was noted by February 2021, with the coverage ratio returning to 6.31 as earnings rebounded to US$ 3.02 billion.
- Recent Deterioration
- A notable decline in solvency is evident in February 2022. While fixed charges remained relatively stable at US$ 445.9 million, earnings before fixed charges and tax dropped significantly to US$ 756.3 million. This resulted in the coverage ratio falling to 1.70, the lowest positive level recorded in the analyzed period, suggesting a diminished capacity to service fixed charges compared to previous years.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?