FedEx Corp. (NYSE:FDX)

Debt to Equity

The debt to equity ratio shows a consistent decline over the observed period, dropping from 1.2 in May 2020 to 0.73 by May 2025. This indicates a reduction in financial leverage relative to shareholders' equity, suggesting a more conservative capital structure over time.

Debt to Equity (including operating lease liability)

This ratio also decreased steadily from 1.97 in May 2020 to 1.33 in May 2025, reflecting reduced reliance on debt when operating lease liabilities are considered. Although higher than the traditional debt to equity ratio, the downward trend remains clear, indicating improved debt management inclusive of lease obligations.

Debt to Capital

The debt to capital ratio declined from 0.55 in May 2020 to 0.42 in May 2025, demonstrating a decreasing proportion of debt in the company’s capital structure, consistent with the trends observed in the debt to equity ratios.

Debt to Capital (including operating lease liability)

This metric shows a slight decline from 0.66 in May 2020 to 0.57 in May 2025. The inclusion of operating lease liabilities increases the ratio, but the consistent downward movement indicates progress in reducing overall debt levels relative to capital base.

Debt to Assets

The debt to assets ratio decreased from 0.30 in May 2020 to 0.23 in May 2025. This indicates a decreasing proportion of assets financed through debt, reflecting a strengthening balance sheet and lower financial risk from debt financing.

Debt to Assets (including operating lease liability)

Similarly, the adjusted debt to assets ratio including operating lease liabilities declined from 0.49 in May 2020 to 0.43 in May 2025, showing a moderate improvement while acknowledging the lease liabilities as debt-like obligations.

Financial Leverage

The financial leverage ratio decreased from 4.02 in May 2020 to 3.12 in May 2025. This indicates a decline in the use of debt and other liabilities relative to equity, pointing toward a more balanced capital structure and reduced financial risk.

Interest Coverage

Interest coverage experienced a significant increase from 3.48 in May 2020 to a peak of 9.42 in May 2021, followed by a gradual decline to 7.9 by May 2025. Despite the recent slight decrease, the company maintains a strong ability to meet interest obligations relative to earnings, indicating solid operating performance and debt service capacity.

Fixed Charge Coverage

This ratio increased from 1.5 in May 2020 to 2.83 in May 2021, thereafter fluctuating moderately to settle at 2.29 in May 2025. The upward movement reflects improved capability to cover fixed charges, although the subsequent variations suggest some volatility in fixed expense coverage.

The financial data reveals notable trends in the company's capital structure over the six-year period ending May 31, 2025.

Total Debt

Total debt has remained relatively stable, fluctuating within a narrow range between approximately $20.2 billion and $22.0 billion. Specifically, it started at $22.0 billion in 2020, decreased gradually to about $20.3 billion by 2024, and then slightly increased again to $20.6 billion in 2025. This indicates a consistent management of debt levels without significant increases or reductions over the period.

Common Stockholders’ Investment

Common stockholders’ investment showed a steady upward trend throughout the period, growing from $18.3 billion in 2020 to $28.1 billion in 2025. This reflects a sustained increase of over $9 billion, signaling an expansion in equity base likely due to retained earnings, stock issuances, or other equity-augmenting activities.

Debt to Equity Ratio

The debt to equity ratio demonstrates a marked decline from 1.2 in 2020 to 0.73 in both 2024 and 2025. This decreasing trend signifies an improving equity position relative to debt, indicating enhanced financial leverage and potentially a more conservative capital structure. The decline aligns with the growth in common stockholders’ investment and the relatively stable total debt, showing reduced reliance on debt financing over time.

Overall, the company’s financial structure appears to have strengthened, with increased equity supporting a stable debt load and resulting in a substantially lower debt to equity ratio. This pattern suggests improved solvency and potentially greater financial flexibility.

Total Debt (including operating lease liability)

The total debt shows a gradual increase from 36,121 million USD in 2020 to a peak of 38,332 million USD in 2023. Following that, there is a slight decline, reaching 37,416 million USD by 2025. This indicates a relatively stable debt level with minor fluctuations over the six-year period.

Common Stockholders’ Investment

The common stockholders’ investment exhibits a steady upward trend throughout the period. It increases significantly from 18,295 million USD in 2020 to 28,074 million USD in 2025, indicating consistent growth in equity capital and a strengthening in the company’s net worth.

Debt to Equity Ratio (including operating lease liability)

The debt to equity ratio shows a declining trend, decreasing from 1.97 in 2020 to 1.33 in 2025. This suggests an improving capital structure, with the company increasingly relying on equity rather than debt for financing. The ratio’s steady reduction reflects enhanced financial stability and potentially lower financial risk over time.

Total Debt

The total debt experienced a general decline from US$22,003 million in May 2020 to US$20,203 million in May 2024, with a minor uptick to US$20,579 million projected in May 2025. This trend indicates efforts toward debt reduction over the observed periods, albeit with slight fluctuations in recent years.

Total Capital

Total capital showed a consistent upward trend throughout the period, increasing from US$40,298 million in May 2020 to an estimated US$48,653 million by May 2025. This steady growth suggests a strengthening capital base and potential reinvestment or accumulation of equity within the company.

Debt to Capital Ratio

The debt to capital ratio declined steadily from 0.55 in May 2020 to 0.42 by May 2025. This downward trend reflects an improving balance sheet structure characterized by a lower reliance on debt relative to total capital. The reduction in this ratio aligns with the observed pattern of decreasing total debt and increasing total capital.

Overall Insights

The data collectively indicate a strategic movement towards strengthening the company's financial position. Declining leverage, evidenced by the falling debt to capital ratio, coupled with growth in total capital, suggests enhanced financial stability and potentially greater capacity for investment or debt servicing. The minor recent increase in total debt may warrant monitoring but does not materially alter the overall positive trend over the five-year span.

The financial data reveals several notable trends in the company's capital structure over the examined period.

Total Debt (including operating lease liability)

The total debt level exhibits a gradual increase from 36,121 million USD in 2020 to a peak of 38,332 million USD in 2023. Subsequently, there is a moderate decline to 37,416 million USD by 2025. This suggests a period of cautious leverage expansion followed by a slight deleveraging effort in the most recent years.

Total Capital (including operating lease liability)

Total capital shows a consistent upward trend throughout the period, rising from 54,416 million USD in 2020 to 65,490 million USD in 2025. The steady increase in capital indicates ongoing growth in the company's funding base, which may reflect expansion in equity, retained earnings, or additional financial resources.

Debt to Capital Ratio (including operating lease liability)

The debt to capital ratio declines gradually from 0.66 in 2020 to 0.57 in 2025. This decreasing leverage ratio highlights a strategic shift toward a more balanced capital structure, improving financial stability by lowering dependence on debt financing relative to total capital.

Overall, the company demonstrates a trend of growing its capital base while cautiously managing its debt levels, resulting in a reduced leverage ratio. This suggests an emphasis on strengthening the balance sheet and potentially enhancing creditworthiness over time.

The analysis of the financial data over the six-year period reveals specific trends in debt, assets, and leverage ratios.

Total Debt

Total debt exhibits a gradual decline from 22,003 million USD in 2020 to 20,579 million USD in 2023. The value slightly decreases in 2024 to 20,203 million USD but returns to 20,579 million USD in 2025, indicating relative stability in the latter years.

Total Assets

Total assets show consistent growth throughout the period, increasing from 73,537 million USD in 2020 to 87,627 million USD in 2025. The growth rate slows in the last two years but remains positive, suggesting ongoing asset accumulation and expansion of the asset base.

Debt to Assets Ratio

The debt to assets ratio steadily declines from 0.30 in 2020 to 0.23 in 2025. This decrease indicates an improvement in the company’s leverage position, reflecting the combination of stable or decreasing debt and a growing asset base. The overall reduction in this ratio suggests enhanced financial stability and a lower proportion of liabilities relative to assets.

The financial data reveals several pertinent trends related to the company's leverage and asset base over the analyzed periods.

Total Debt (Including Operating Lease Liability)

The total debt demonstrates a gradual increase from 36,121 million US dollars in 2020 to a peak of 38,332 million US dollars in 2023. Subsequently, there is a slight decline observed in the following years, with debt levels reducing to 37,719 million in 2024 and further to 37,416 million in 2025. This indicates a period of increased borrowing or liability accumulation up to 2023, followed by modest debt reduction efforts.

Total Assets

Total assets show a consistent upward trend throughout the periods, rising from 73,537 million US dollars in 2020 to 87,627 million US dollars in 2025. This steady growth in asset base reflects ongoing investment or asset accumulation by the company.

Debt to Assets Ratio

The debt to assets ratio starts at 0.49 in 2020, indicating that debt constituted 49% of total assets. It decreases significantly to 0.44 in 2021 and continues to slightly decline or stabilize near 0.43 through the later years. This trend suggests an improvement in the company’s capital structure, with relatively lower leverage over time, implying a stronger equity position or more effective asset management in relation to debt.

Overall, the company displays a moderate increase in indebtedness up to 2023, followed by a cautious reduction, while simultaneously expanding the asset base steadily. The declining debt to assets ratio indicates an improved balance between liabilities and assets, reflecting a potentially more stable financial position as of the most recent periods.

Total assets

Total assets exhibited a steady upward trend from 73,537 million USD in 2020 to 87,627 million USD in 2025. The increase was consistent year over year, with a slight deceleration in growth rate observed from 2023 to 2025 when the asset base stabilized around the 87,000 million USD mark.

Common stockholders’ investment

Common stockholders’ investment showed a continuous increase over the six-year period, rising from 18,295 million USD in 2020 to 28,074 million USD in 2025. This growth indicates an expanding equity base, with the most notable increases occurring between 2020 and 2021, and a steady but more moderate growth pattern thereafter.

Financial leverage

Financial leverage decreased steadily from a ratio of 4.02 in 2020 to 3.12 in 2025. This indicates a gradual reduction in the reliance on debt relative to equity, suggesting an improving capital structure and potentially lower financial risk over the period analyzed.

Earnings Before Interest and Tax (EBIT)

The EBIT figures demonstrate substantial growth from May 31, 2020, to May 31, 2021, increasing from 2,341 million US dollars to 7,467 million US dollars. This sharp rise is followed by a decline in the subsequent year to 5,585 million US dollars, then a recovery trend with moderate increases in 2023 and 2024, reaching 6,581 million US dollars. In the latest period, May 31, 2025, there is a slight decrease to 6,230 million US dollars. Overall, EBIT shows volatility with an initial surge, a dip, and then a partial recovery.

Interest Expense

Interest expense exhibits a steadily increasing trend over the observed periods. Starting at 672 million US dollars in 2020, it rises gradually each year, reaching 789 million US dollars by May 31, 2025. The increase is modest and consistent, indicating possibly higher borrowing or increased costs of debt.

Interest Coverage Ratio

The interest coverage ratio, indicating the ability to meet interest obligations, grows significantly from 3.48 in 2020 to a peak of 9.42 in 2021. This reflects improved earnings relative to interest costs. Thereafter, the ratio declines to 8.11 in 2022 but generally remains stable with minor fluctuations, measured at 7.9 in 2025. Despite the decrease from the peak, the ratio stays at levels suggesting a strong capacity to cover interest expenses throughout the period.

Earnings before fixed charges and tax

The earnings before fixed charges and tax demonstrate a strong upward trend from 2020 to 2021, more than doubling from 5,009 million USD to 10,315 million USD. However, this positive momentum is not sustained in the following years, as earnings decline to 8,685 million USD in 2022. After 2022, a gradual recovery is observed, with earnings increasing to 9,907 million USD by 2024, followed by a slight decrease to 9,651 million USD in 2025. Overall, earnings show volatility with a peak in 2021 and a subsequent period of fluctuation.

Fixed charges

Fixed charges steadily increase throughout the period, starting at 3,340 million USD in 2020 and growing consistently each year to reach 4,210 million USD in 2025. This trend signifies increasing financial obligations that could impact profitability if not matched by proportional revenue growth.

Fixed charge coverage ratio

The fixed charge coverage ratio, an indicator of the ability to meet fixed financial obligations, shows significant improvement from 1.5 in 2020 to 2.83 in 2021, reflecting a strong capacity to cover fixed charges that year. However, it declines to 2.29 in 2022 and remains relatively stable with slight fluctuations between 2.29 and 2.43 through 2025. This pattern suggests that while the company maintains a reasonable buffer over fixed charges, its coverage strength has weakened from the peak in 2021 and somewhat stabilized at a moderate level.

Summary of trends

Overall, financial performance exhibits initial robust growth in earnings before fixed charges and tax, followed by volatility and partial recovery. Fixed charges increase steadily, applying growing pressure on earnings. The fixed charge coverage ratio improves markedly in the early period but decreases and stabilizes at a more modest level thereafter. This indicates that while ability to meet fixed charges remains adequate, the margin of safety has narrowed compared to the peak year.