FedEx Corp. (NYSE:FDX)

Debt to equity ratio

The debt to equity ratio shows a general declining trend over the periods from 0.99 in 2019 to 0.73 in 2024. This indicates a decreasing reliance on debt relative to equity, suggesting an improvement in the company’s capital structure. When including operating lease liabilities, the ratio initially rises significantly from 0.99 in 2019 to 1.97 in 2020, then gradually decreases to 1.37 in 2024. This implies lease liabilities contributed notably to the overall leverage particularly around 2020 but have become less impactful over time.

Debt to capital ratio

The debt to capital ratio exhibits a downward trend from 0.50 in 2019 to 0.42 in 2024, indicating a reduction in the proportion of debt in the company's total capital base. Including operating lease liabilities, the ratio mentions an increase to 0.66 in 2020 followed by a steady decline to 0.58 in 2024, confirming that lease obligations have influenced total debt capital but are gradually diminishing as a component.

Debt to assets ratio

The standard debt to assets ratio decreases from 0.32 in 2019 to 0.23 in 2024, signalling a reduction in the company's leverage relative to its asset base. However, when operating lease liabilities are factored in, this ratio is considerably higher, hitting 0.49 in 2020 and moderating to 0.43 in 2024. This adjustment reveals the substantial role of lease liabilities in the total debt profile but also an improved asset coverage of liabilities over time.

Financial leverage ratio

Financial leverage reached a peak of 4.02 in 2020, then decreased to 3.15 by 2024. This pattern suggests the company experienced heightened leverage in 2020, possibly due to increased borrowing or reduced equity, then improved its leverage position steadily in subsequent years.

Interest coverage ratio

Interest coverage improved markedly from 2.11 in 2019 to a peak of 9.42 in 2021, indicating a stronger ability to meet interest obligations from earnings. Although there was a slight decline after 2021, interest coverage remained high at 8.83 in 2024, reflecting sustained robust earnings relative to interest expenses.

Fixed charge coverage ratio

Fixed charge coverage also increased notably from 1.19 in 2019 to 2.83 in 2021, demonstrating improved capacity to cover fixed financial charges. While it decreased somewhat post-2021, the ratio stabilized around 2.43 in 2024, indicating reasonable coverage of fixed charges throughout the recent periods.

Total debt

The total debt shows an overall upward movement from May 31, 2019, to May 31, 2020, increasing from 17,581 million USD to 22,003 million USD. Following this peak, there is a gradual decline over the subsequent years, with total debt decreasing to 20,203 million USD by May 31, 2024. This indicates a reduction in debt levels after a temporary rise in 2020.

Common stockholders’ investment

Common stockholders' investment exhibits a consistent upward trend throughout the entire period. Starting at 17,757 million USD in May 2019, it increased steadily each year, reaching 27,582 million USD by May 31, 2024. This pattern reflects a growing equity base over time.

Debt to equity ratio

The debt to equity ratio initially rises from 0.99 in 2019 to a peak of 1.2 in 2020, indicating an increased reliance on debt relative to equity in that year. Afterward, the ratio declines progressively each year, reaching 0.73 in 2024. This declining ratio suggests a strengthening equity position relative to debt, improving the company's financial leverage and potentially enhancing financial stability.

Total Debt (including operating lease liability)

The total debt exhibits a significant increase from 2019 to 2020, more than doubling from 17,581 million USD to 36,121 million USD. From 2020 onwards, the debt level stabilizes with slight fluctuations, peaking at 38,332 million USD in 2023 before decreasing modestly to 37,719 million USD in 2024.

Common Stockholders' Investment

Common stockholders' investment shows a steady upward trend throughout the period under review. It rises from 17,757 million USD in 2019 to 27,582 million USD in 2024, indicating consistent growth in equity capitalization over the six-year timeframe.

Debt to Equity Ratio (including operating lease liability)

The debt to equity ratio nearly doubles from 0.99 in 2019 to 1.97 in 2020, reflecting a substantial increase in leverage relative to equity. Subsequently, the ratio declines steadily to 1.37 by 2024, suggesting a gradual deleveraging process and an improving balance between debt and equity financing.

Total Debt

The total debt exhibited an overall increasing trend from 2019 to 2020, rising from $17,581 million to $22,003 million. Subsequently, the debt levels slightly decreased in 2021 to $20,879 million and maintained a relatively stable range through 2024, fluctuating marginally but ending slightly below the 2019 value at $20,203 million. This indicates a peak in debt in 2020 followed by a moderate reduction and stabilization over the following years.

Total Capital

Total capital increased consistently throughout the entire period. Beginning at $35,338 million in 2019, it rose steadily each year, reaching $47,785 million by 2024. This steady growth reflects an expansion in the overall capital base and suggests an increase in equity, liabilities, or retained earnings supporting the company’s financial structure.

Debt to Capital Ratio

The debt to capital ratio decreased steadily over the six-year period, moving from 0.50 in 2019 down to 0.42 in 2024. This decline indicates a gradual reduction in the proportion of debt relative to total capital. Despite fluctuations in total debt, the faster growth in total capital led to a lower leverage ratio, pointing to an improved capital structure with reduced financial risk and potentially greater financial stability.

Summary Insights

Overall, the company has managed to moderate its total debt levels following a peak in 2020, while expanding its total capital base significantly between 2019 and 2024. The resultant decrease in the debt to capital ratio suggests a strategic focus on strengthening the financial foundation by building more capital relative to debt, thereby enhancing solvency and reducing leverage risk. The company appears to be maintaining a prudent balance sheet with an emphasis on financial stability and long-term growth prospects.

The data reveals several notable trends in the capital structure and debt levels over the six-year period ending May 31, 2024.

Total debt (including operating lease liability)

Total debt showed a significant increase between 2019 and 2020, more than doubling from approximately 17.6 billion USD to over 36.1 billion USD. Following this sharp rise, debt levels remained relatively stable, fluctuating modestly between 36.4 billion USD and 38.3 billion USD in the subsequent years. By May 2024, total debt slightly decreased to 37.7 billion USD.

Total capital (including operating lease liability)

Total capital increased steadily throughout the period, advancing from roughly 35.3 billion USD in 2019 to 65.3 billion USD in 2024. The most notable growth occurred between 2019 and 2020, with total capital rising by over 20 billion USD, followed by more moderate but consistent increases each year thereafter. This indicates an expansion in the company’s financial base.

Debt to capital ratio (including operating lease liability)

The debt to capital ratio exhibited considerable variability. In 2019, the ratio stood at 0.50, implying that half of the capital was funded through debt. This ratio spiked to 0.66 in 2020, reflecting the sharp increase in debt relative to total capital during that year. Following 2020, the ratio decreased and stabilized around 0.60, with a slight decline to 0.58 by 2024. This suggests the company maintained a relatively consistent leverage level after the initial increase, with a modest move towards lower leverage in the most recent year.

Overall, the financial data indicates a strategic increase in both debt and capital in 2020, followed by a period of stabilization. The company appears to have managed its debt levels to maintain a consistent leverage ratio, while steadily growing its capital base over time. This pattern may reflect efforts to support operational or growth initiatives financed through increased capital resources without allowing leverage to rise excessively.

Total Debt

The total debt exhibited an overall increase from 17,581 million USD in 2019 to a peak of 22,003 million USD in 2020. Following this peak, a decline was observed, with the debt decreasing to 20,879 million USD in 2021, then gradually reducing further to 20,203 million USD by 2024. This indicates a managed reduction in liabilities over the last several years after a significant rise in 2020.

Total Assets

Total assets demonstrated a consistent upward trend from 54,403 million USD in 2019 to 87,007 million USD in 2024. The most notable increases occurred between 2019 and 2020, and again between 2020 and 2021, suggesting substantial asset growth during these periods. The growth rate moderated somewhat from 2022 through 2024, but asset levels remained relatively stable and high.

Debt to Assets Ratio

The debt to assets ratio showed a continuous decline from 0.32 in 2019 to 0.23 in 2024. This decreasing ratio suggests an improvement in the company’s capital structure, reflecting either a reduction in relative debt burden or an increase in asset base, or a combination of both. This trend indicates strengthening financial stability and potentially lower financial risk over time.

Total Debt (Including Operating Lease Liability)

The total debt showed a significant increase from 2019 to 2020, more than doubling from 17,581 million US dollars to 36,121 million US dollars. From 2020 onwards, total debt remained relatively stable, with slight fluctuations around the 37,000 million US dollars mark, reaching 37,719 million US dollars in 2024.

Total Assets

Total assets demonstrated a steady upward trend throughout the period. Starting at 54,403 million US dollars in 2019, total assets increased each year, peaking at 87,143 million US dollars in 2023 before a marginal decrease to 87,007 million US dollars in 2024. This progression reflects continuous asset growth over the six-year period.

Debt to Assets Ratio (Including Operating Lease Liability)

The debt to assets ratio experienced notable changes, increasing sharply from 0.32 in 2019 to 0.49 in 2020, indicating a higher proportion of debt relative to assets. Subsequently, the ratio decreased to 0.44 in 2021 and then stabilized around 0.43 to 0.44 in the following years through 2024. This suggests an improved balance between debt and assets after the initial rise in leverage observed in 2020.

Overall Analysis

The data indicates a period of increased leverage and debt acquisition in 2020, likely in response to specific operational or market conditions. Despite this increase, the company maintained steady asset growth and effectively stabilized its debt to assets ratio in subsequent years, suggesting prudent balance sheet management. The stabilization of total debt and debt to asset ratio after 2020 indicates controlled financial risk alongside gradual asset expansion.

Total Assets

The total assets exhibited a consistent upward trend over the five-year period from May 31, 2019, through May 31, 2024. Starting at $54,403 million in 2019, the assets increased significantly to $73,537 million in 2020, indicating a substantial asset growth likely reflecting strategic investments or acquisitions. Following this jump, the assets continued to grow at a more moderate pace, reaching $87,007 million by 2024. This steady growth suggests ongoing expansion and asset accumulation within the company.

Common Stockholders’ Investment

Common stockholders’ investment also showed a clear increasing trajectory, beginning at $17,757 million in 2019 and rising to $27,582 million by 2024. The growth accelerated notably between 2020 and 2021, increasing from $18,295 million to $24,168 million, which may indicate retained earnings growth, share issuance, or capital injections. The subsequent years saw continued but more moderate increases, reflecting sustained confidence from investors and retained profitability.

Financial Leverage

Financial leverage, defined as the ratio of total assets to common stockholders’ investment, experienced fluctuations within the range of 3.06 to 4.02 over the period. It peaked at 4.02 in 2020, coinciding with the significant asset growth that year, implying greater reliance on debt or other liabilities relative to equity during that time. Thereafter, financial leverage gradually declined to 3.15 by 2024. This decreasing trend suggests a progressive reduction in leverage risk and a stronger equity base relative to assets, improving the company’s financial stability and capacity to meet obligations without excessive debt dependence.

Earnings before Interest and Tax (EBIT)

The EBIT shows a significant increase from 2019 to 2021, rising sharply from 1,243 million US dollars in 2019 to a peak of 7,467 million US dollars in 2021. This represents a substantial improvement in operational profitability. However, there was a notable decline in 2022, with EBIT decreasing to 5,585 million US dollars. Following this decline, EBIT exhibited a modest recovery in the subsequent years, reaching 6,581 million US dollars by 2024. Overall, the trend indicates strong growth until 2021, a drop in 2022, and gradual stabilization thereafter.

Interest Expense

Interest expense increased steadily over the six-year period. Starting at 588 million US dollars in 2019, the expense rose each year, reaching 745 million US dollars in 2024. The increase is relatively moderate and consistent, reflecting possibly higher debt levels or changes in interest rates but without sharp fluctuations.

Interest Coverage Ratio

The interest coverage ratio improved markedly from 2.11 in 2019 to a peak of 9.42 in 2021, indicating a significantly enhanced ability to meet interest obligations from operating earnings. After 2021, the ratio declined somewhat but remained strong, staying above 8.0 for the years 2022 through 2024. The ratio's stability at high levels following 2021 suggests sustained operational earnings relative to interest costs, despite the decrease in EBIT in 2022.

Earnings before fixed charges and tax

The earnings before fixed charges and tax exhibited a general upward trend over the six-year period. Starting at 4,118 million USD in 2019, the figure increased steadily to reach a peak of 10,315 million USD in 2021. While there was a decline to 8,685 million USD in 2022, earnings recovered in the following years, reaching 9,907 million USD by 2024. This pattern suggests an overall strengthening in operating profitability with some volatility in the middle years.

Fixed charges

Fixed charges showed a gradual and consistent increase throughout the period. The amount rose from 3,463 million USD in 2019 to 4,071 million USD in 2024, marking a steady growth in financial obligations related to interest and lease expenses. The increase appears moderate compared to the fluctuations seen in earnings, indicating a relatively stable cost structure in terms of fixed charges.

Fixed charge coverage ratio

The fixed charge coverage ratio, which measures the ability to meet fixed financial obligations, improved substantially from 1.19 in 2019 to a peak of 2.83 in 2021. Following this peak, the ratio declined to 2.29 in 2022 but then gradually increased again to 2.43 by 2024. Overall, the ratio remained well above 1.0 throughout the period, indicating that earnings consistently exceeded fixed charges, with enhanced coverage notably observed during 2020 to 2024.