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McKesson Corp. (NYSE:MCK)

This company has been moved to the archive! The financial data has not been updated since October 27, 2016.

Common-Size Balance Sheet: Liabilities and Stockholders’ Equity

McKesson Corp., common-size consolidated balance sheet: liabilities and stockholders’ equity

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Mar 31, 2016 Mar 31, 2015 Mar 31, 2014 Mar 31, 2013 Mar 31, 2012 Mar 31, 2011
Drafts and accounts payable 50.54 46.72 41.40 46.31 48.69 45.62
Short-term borrowings 0.01 0.25 0.67 0.00 1.21 0.00
Deferred revenue 1.62 2.00 2.39 3.91 4.30 4.28
Deferred tax liabilities 0.00 3.38 3.07 4.67 3.30 3.36
Current portion of long-term debt 2.85 2.84 2.75 1.01 1.54 1.35
Other accrued liabilities 6.98 7.00 6.72 5.50 6.49 6.03
Current liabilities 62.00% 62.18% 57.00% 61.40% 65.53% 60.63%
Long-term debt, excluding current portion 11.55 15.18 17.29 13.00 9.28 11.61
Long-term deferred tax liabilities 4.83 1.59 2.48 0.80 0.27 0.00
Other noncurrent liabilities 3.20 3.46 3.30 4.48 4.28 4.38
Noncurrent liabilities 19.59% 20.24% 23.07% 18.28% 13.83% 15.99%
Total liabilities 81.59% 82.42% 80.07% 79.68% 79.36% 76.62%
Redeemable noncontrolling interests 2.49 2.57 0.00 0.00 0.00 0.00
Preferred stock, $0.01 par value, no shares issued or outstanding 0.00 0.00 0.00 0.00 0.00 0.00
Common stock, $0.01 par value 0.01 0.01 0.01 0.01 0.01 0.01
Additional paid-in capital 10.33 12.93 12.66 17.47 16.83 17.29
Retained earnings 14.78 23.58 22.13 29.90 28.56 26.71
Accumulated other comprehensive income (loss) -2.76 -3.18 -0.01 -0.19 0.02 0.28
Other 0.00 -0.01 0.04 0.04 0.01 0.03
Treasury shares, at cost -6.58 -18.48 -18.37 -26.92 -24.79 -20.95
Total McKesson Corporation stockholders’ equity 15.78% 14.85% 16.46% 20.32% 20.64% 23.38%
Noncontrolling interests 0.15 0.16 3.47 0.00 0.00 0.00
Total equity 15.93% 15.01% 19.93% 20.32% 20.64% 23.38%
Total liabilities, redeemable noncontrolling interests and equity 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%

Based on: 10-K (reporting date: 2016-03-31), 10-K (reporting date: 2015-03-31), 10-K (reporting date: 2014-03-31), 10-K (reporting date: 2013-03-31), 10-K (reporting date: 2012-03-31), 10-K (reporting date: 2011-03-31).

An analysis of the common-size balance sheet reveals a progressive shift in the capital structure, characterized by an increasing reliance on liabilities and a simultaneous contraction in total equity as a percentage of total liabilities, redeemable noncontrolling interests, and equity.

Liability Composition and Trends
Total liabilities exhibited a general upward trajectory, rising from 76.62% in 2011 to 81.59% by 2016. Current liabilities remained the primary driver of this trend, consistently representing between 57% and 65.5% of the total structure. Within this category, drafts and accounts payable emerged as the most significant component, peaking at 50.54% in 2016, which suggests a heavy reliance on trade credit for operational financing. Conversely, deferred revenue showed a steady decline from 4.28% in 2011 to 1.62% in 2016.
Long-Term Obligations
Noncurrent liabilities fluctuated throughout the period, peaking at 23.07% in 2014 before moderating to 19.59% in 2016. Long-term debt, excluding the current portion, followed a similar bell-shaped curve, increasing from 11.61% in 2011 to a peak of 17.29% in 2014, then decreasing to 11.55% by 2016. A notable increase was observed in long-term deferred tax liabilities, which grew from 0.27% in 2012 to 4.83% in 2016, indicating a rising future tax obligation relative to the total balance sheet.
Equity Erosion and Capital Management
Total equity experienced a significant downward trend, declining from 23.38% in 2011 to 15.93% in 2016. This reduction is primarily attributable to the decrease in retained earnings, which fell from 26.71% to 14.78%, and a decline in additional paid-in capital from 17.29% to 10.33%. These patterns suggest aggressive capital return strategies, such as dividends or share repurchases.
Treasury Shares and Comprehensive Income
Treasury shares, recorded as a contra-equity account, showed significant volatility, reaching a peak negative impact of -26.92% in 2013 before reducing to -6.58% by 2016. Additionally, accumulated other comprehensive income shifted from a positive 0.28% in 2011 to a negative 2.76% by 2016, contributing to the overall compression of the equity base.

Overall, the financial positioning shifted toward a more highly leveraged model, with a diminished equity cushion and a heightened dependence on short-term trade payables and long-term deferred tax obligations.

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