Dollar General Corp. (NYSE:DG)

The financial data reveals clear trends in both reported and goodwill adjusted figures over the six-year period ending in early 2024.

Total Assets

Reported total assets increased significantly from $13.2 billion in 2019 to $30.8 billion in 2024, showing consistent growth each year. The largest jump occurred between 2019 and 2020, with a subsequent moderate but steady increase through 2024.

Adjusted total assets, which exclude goodwill, followed a similar upward trajectory, rising from approximately $8.9 billion in 2019 to $26.5 billion in 2024. This trend confirms overall asset base expansion beyond just goodwill contributions.

Shareholders' Equity

Reported shareholders’ equity exhibited fluctuations over the period. Starting at roughly $6.4 billion in 2019, it peaked slightly in 2020 at $6.7 billion, then gradually declined until 2023, reaching about $5.5 billion, before rebounding to $6.7 billion in 2024. This pattern indicates some volatility in equity but a recovery at the end of the timeframe.

Goodwill adjusted shareholders’ equity, in contrast, showed a declining trend overall. Beginning relatively low at about $2.1 billion in 2019, it increased slightly in 2020, then decreased consistently through 2023 to just over $1.2 billion, before notably rising to $2.4 billion in 2024. This suggests that removing goodwill impacts the equity base substantially, reflecting possible impairments or write-downs in intangible assets during the years prior to 2024.

Insights

The data implies that the company's asset growth has been strong and steady when considering both reported and adjusted figures. However, the disparity and fluctuating trends in shareholders’ equity, especially after adjusting for goodwill, highlight potential challenges related to intangible asset valuation and capital structure shifts.

The notable recovery in adjusted shareholders’ equity in 2024 could indicate improved asset management or equity financing activities. The consistent growth in adjusted total assets supports the view of an expanding operational base beyond reliance on goodwill.

Total Asset Turnover

The reported total asset turnover shows a marked decline from 1.94 in 2019 to 1.22 in 2020, followed by a modest recovery stabilizing around 1.3 through 2023 before slightly decreasing to 1.26 in 2024. The adjusted total asset turnover, which accounts for goodwill, follows a similar pattern but at higher values overall. It falls sharply from 2.89 in 2019 to 1.5 in 2020, then experiences a gradual decrease and stabilization from 1.57 in 2021 to 1.46 in 2024. This trend suggests diminishing efficiency in asset utilization over time with a slight improvement after the initial drop.

Financial Leverage

Reported financial leverage increases significantly from 2.06 in 2019 to a peak of 5.25 in 2023, before declining to 4.56 in 2024. Adjusted financial leverage presents a more pronounced upward trajectory, rising steeply from 4.26 in 2019 to 20.57 in 2023, then decreasing to 10.98 in 2024. This indicates a substantial increase in reliance on debt or other liabilities relative to equity when goodwill is considered, peaking in 2023 with a notable reduction the following year. The elevated leverage may reflect increased financial risk during this period.

Return on Equity (ROE)

Reported ROE exhibits a general upward trend reaching a high of 43.6% in 2023, before dropping sharply to 24.61% in 2024. Adjusted ROE, which excludes goodwill effects, shows a similar pattern with higher magnitude, climbing from 76.46% in 2019 to an exceptional 200.8% in 2023, then falling to 68.92% in 2024. The elevated ROE levels suggest higher profitability on equity, driven by increased leverage and efficiency; however, the sharp decline in 2024 denotes a significant reduction in profitability.

Return on Assets (ROA)

Reported ROA declines from 12.04% in 2019 to 7.5% in 2020, followed by some recovery to around 9-10% in subsequent years until falling to 5.39% in 2024. Adjusted ROA mirrors this trend with slightly higher values, decreasing from 17.93% in 2019 to 9.26% in 2020, stabilizing near 10-11% through 2022, then falling to 6.28% in 2024. The overall decreasing ROA suggests reduced efficiency in generating profit from total assets.

Summary Insights

The data indicates that after a notable dip in efficiency and profitability measures in 2020, there was partial recovery in subsequent years, with peak values often observed in 2023. Both asset turnover and ROA demonstrate declining trends over the period, pointing to diminishing operational efficiency. Financial leverage increased substantially, especially when adjusted for goodwill, implying higher financial risk during 2023. While ROE reached very high levels in 2023, the sharp declines in both ROE and ROA in 2024 suggest challenges in maintaining profitability and asset utilization. The adjusted metrics consistently show higher volatility and magnitudes, emphasizing the impact of goodwill adjustments on financial analysis.

Total Assets

The reported total assets have exhibited a consistent upward trend from 13,204,038 thousand US dollars in February 2019 to 30,795,591 thousand US dollars in February 2024. This reflects a more than twofold increase over the five-year period. Similarly, the adjusted total assets, which account for goodwill adjustments, also increased significantly from 8,865,449 thousand US dollars in February 2019 to 26,457,002 thousand US dollars in February 2024. Both metrics demonstrate substantial growth, although the adjusted total assets remain lower than the reported figures, indicating the impact of goodwill on the asset base.

Total Asset Turnover

The reported total asset turnover ratio shows a declining trend from 1.94 in February 2019 to a range near 1.3 during 2021 to 2023, with a slight decrease to 1.26 in February 2024. This decrease indicates a reduction in the efficiency of asset utilization as measured by sales generated per dollar of assets reported.

On the other hand, the adjusted total asset turnover ratio also declined from a higher value of 2.89 in February 2019 to 1.46 in February 2024. The adjusted ratio, which excludes goodwill, shows a relatively sharper decrease in asset turnover efficiency compared to the reported ratio but remains consistently higher than the reported turnover throughout the period.

Insights and Patterns

The increasing asset base reflected in both reported and adjusted figures suggests ongoing investment or acquisitions expanding the company’s total resources. The steadier and substantial growth in assets, paired with a noticeable decline in turnover ratios, may imply that asset growth outpaced revenue growth, potentially indicating a decrease in asset efficiency over time.

The disparity between reported and adjusted metrics underscores the significance of goodwill adjustments. Adjusted ratios provide a more conservative view of asset utilization efficiency, showing that when intangible assets like goodwill are excluded, the company’s capacity to generate revenue per dollar of tangible assets is higher but still trending downward.

Overall, the data highlight the company's expansion in asset size alongside a gradual reduction in asset turnover, signaling a need to monitor asset utilization to maintain or improve operational efficiency.

Total Assets

The reported total assets show a consistent upward trend from 13.2 billion to 30.8 billion over the six-year period, indicating sustained growth in the company's asset base. The adjusted total assets, which exclude goodwill, follow a similar growth pattern, rising from approximately 8.9 billion to 26.5 billion, reflecting a substantial increase in tangible and other non-goodwill assets.

Shareholders’ Equity

The reported shareholders’ equity initially increased from around 6.4 billion to 6.7 billion between 2019 and 2020, followed by a gradual decline to approximately 5.5 billion by 2023 before rising again to 6.7 billion in 2024. This fluctuation suggests variability in net assets or retained earnings during the period. The adjusted shareholders’ equity shows a declining pattern from about 2.1 billion to 1.2 billion by 2023, with a recovery to 2.4 billion in 2024. The adjusted figures, which exclude goodwill, indicate more volatility and lower equity values compared to the reported numbers.

Financial Leverage

The reported financial leverage ratio increased from 2.06 in 2019 to a peak of 5.25 in 2023, before decreasing to 4.56 in 2024. This rising leverage indicates an increasing reliance on debt relative to equity over most of the period, followed by some deleveraging in the final year. The adjusted financial leverage, which accounts for goodwill adjustments, presents a more pronounced upward trend, rising from 4.26 to a peak of 20.57 in 2023 before decreasing to 10.98 in 2024. This suggests that, when excluding goodwill, the company is significantly more leveraged, particularly in the latter years, implying higher financial risk when intangible assets are removed from the equity base.

Overall Insights

The data reveals that the company has expanded its asset base substantially over the observed years, both in reported and goodwill-adjusted terms. Shareholders’ equity, when adjusted for goodwill, is markedly lower and more volatile than reported equity, which impacts leverage measurements significantly. The increasing adjusted leverage ratio points to growing financial risk and greater dependence on debt financing relative to tangible equity, especially notable from 2020 through 2023. The slight leverage reduction in 2024 may indicate initial steps towards strengthening the equity position or reducing debt levels. These trends should be carefully monitored for implications on the company’s financial stability and risk profile.

The financial data reveals distinct trends in both reported and goodwill adjusted measures over the six-year period under review. Shareholders’ equity, both reported and adjusted, shows notable fluctuations. Reported shareholders’ equity generally remains stable, starting at approximately $6.42 billion in early 2019, increasing modestly through early 2020, then slightly declining until 2023, where it hits a low point near $5.54 billion, before rebounding to around $6.75 billion by early 2024.

In contrast, adjusted shareholders’ equity, which accounts for goodwill adjustments, exhibits a declining trend overall. It starts at roughly $2.08 billion in 2019, grows slightly into 2020, but then consistently decreases year-over-year, reaching a low of about $1.20 billion in 2023. A partial recovery occurs by 2024, bringing the adjusted figure up to approximately $2.41 billion, though this still remains below earlier highs.

Return on equity (ROE) shows significant variation between reported and adjusted bases. Reported ROE begins at 24.77% in 2019, experiences a rising trend with some variability, reaching a peak of 43.6% in 2023, then dropping sharply to 24.61% in 2024. This suggests strong profitability relative to equity, particularly in 2023, but a considerable contraction thereafter.

The adjusted ROE, however, reflects more extreme fluctuations. Starting at a very high 76.46% in 2019, it marginally declines into 2020, then dramatically surges to over 114% in 2021, continuing upward to 124.74% in 2022, and peaking at an extraordinary 200.8% in 2023, before falling back to 68.92% in 2024. These elevated percentages imply a comparatively smaller adjusted equity base due to goodwill adjustments, which amplifies the ROE metric, but also signals volatility in this adjusted measure.

Overall, the data indicates that while reported equity shows relative stability with a rebound after a decline, the adjusted equity figures reflect more pronounced erosion followed by partial restoration. The contrasting ROE figures underscore how goodwill adjustments can significantly impact profitability metrics, with adjusted ROE demonstrating higher volatility and larger swings than the reported figures. This divergence is important for understanding the underlying equity base and return dynamics when factoring out goodwill impairments or adjustments.

Total Assets

Reported total assets exhibited a substantial increase from approximately $13.2 billion in early 2019 to about $30.8 billion in early 2024, indicating strong asset growth nearly doubling over the period. Adjusted total assets, which exclude certain accounting adjustments such as goodwill, followed a similar upward trend, rising from approximately $8.9 billion to around $26.5 billion over the same interval. The narrowing gap between reported and adjusted total assets over time suggests possible changes in goodwill or intangible asset valuation practices.

Return on Assets (ROA)

Reported ROA demonstrated a declining trend overall, starting at 12.04% in 2019 and decreasing to 5.39% by 2024. This decline points to diminishing efficiency in generating profit from reported asset bases. The adjusted ROA, which accounts for asset adjustments, showed a similar pattern but at consistently higher levels than the reported ROA, indicating that when adjusted for goodwill or similar factors, the company maintained relatively better profitability on its asset base. Adjusted ROA peaked at 17.93% in 2019 before declining steadily to 6.28% in 2024.

Comparative Insights

The gap between reported and adjusted ROA suggests that goodwill and other intangible asset adjustments have a significant impact on reported profitability metrics. The decreasing ROA values indicate that asset utilization effectiveness has declined despite asset growth. This could be due to increased asset base outpacing profit growth or other operational factors impacting returns.