Sysco Corp. (NYSE:SYY)

Debt to Equity Ratio

The debt to equity ratio displayed a rising trend from 3.3 in September 2018 to a peak of 12.47 in June 2020, indicating a significant increase in leverage. Following this peak, the ratio generally decreased, settling around the 5.0 to 6.5 range in 2023 and mid-2024, though some volatility remains evident. This pattern suggests periods of increased borrowing followed by deleveraging efforts.

Debt to Equity Ratio (Including Operating Lease Liability)

When incorporating operating lease liabilities, the debt to equity ratio followed a similar pattern but with consistently higher values, reflecting the impact of lease obligations on overall leverage. This ratio peaked at 13.01 in June 2020, slightly higher than the baseline debt to equity, and afterwards showed a decline towards mid-2024, reaching levels close to 6.96.

Debt to Capital Ratio

The debt to capital ratio maintained relative stability, fluctuating narrowly between approximately 0.77 and 0.91 over the period. The ratio increased modestly around the March to June 2020 quarters, coinciding with increased leverage observed in other ratios, then trended slightly downward through 2023, indicating a moderate shift towards reduced reliance on debt financing within the company’s capital structure.

Debt to Capital Ratio (Including Operating Lease Liability)

Including operating lease liabilities raised the debt to capital ratio marginally across all periods, with peaks mirroring those without lease liabilities, particularly around mid-2020. Post-peak, the ratio showed a similar gradual decline, stabilizing around 0.85 to 0.87 in recent quarters, demonstrating a consistent capital mix involving both debt and leases.

Debt to Assets Ratio

The debt to assets ratio experienced an upward movement from approximately 0.45 in early periods to peaks near 0.64 in mid-2020, consistent with increased leverage trends seen in other measures. After the peak, the ratio decreased moderately, settling near 0.48 to 0.5 in 2023 and 2024. This suggests a trend of temporarily increased debt relative to total assets during 2020, followed by partial normalization.

Debt to Assets Ratio (Including Operating Lease Liability)

Including operating lease liabilities consistently elevated the debt to assets ratio relative to the baseline, with a pronounced peak at 0.67 in June 2020. The ratio gradually decreased afterwards but remained higher than the non-inclusive metric, reflecting the sizeable impact of lease obligations on asset financing and overall company leverage.

Financial Leverage

Financial leverage rose sharply from levels around 7 to nearly 20 by June 2020, indicating a substantial increase in the use of debt relative to equity. Subsequent quarters exhibited a decline, with ratios stabilizing between approximately 10 and 15 through 2023 and mid-2024. This suggests the company experienced significant leverage increases during the early pandemic period, followed by efforts to mitigate financial risk.

Interest Coverage Ratio

The interest coverage ratio was only reported starting in March 2019, with initial values above 6, showing a strong ability to cover interest expenses. From March 2020 through December 2020, the ratio dropped precipitously to levels below 1, reaching a low of 0.21, indicating a period of strained ability to meet interest obligations. Thereafter, coverage improved steadily, reaching above 5 in 2023 and mid-2024, signifying recovery in operating income relative to interest expenses and an enhanced capacity to service debt.

Total debt

The total debt fluctuated over the observed periods, beginning at approximately $8.7 billion in late September 2018 and increasing steadily to a peak of around $14.45 billion in the second quarter of 2020. Following this peak, debt levels generally declined, reaching a low near $10.4 billion by mid-2023. However, debt increased again towards the end of 2023 and into mid-2024, stabilizing at approximately $12 billion. This pattern shows a significant rise in debt during early 2020, likely reflecting external pressures or strategic financing decisions, followed by a partial deleveraging phase.

Shareholders’ equity

Shareholders’ equity began at around $2.6 billion in late 2018 but declined sharply to about $1.16 billion by mid-2020. After this decline, equity showed a gradual recovery trend, increasing to just above $2 billion by mid-2023. Towards the end of 2023 and into the first half of 2024, equity decreased somewhat to approximately $1.86 billion. The equity fluctuations correspond broadly with the debt movements, indicating periods of financial stress or restructuring impacting net worth during the earlier years and partial stabilization in more recent periods.

Debt to equity ratio

The debt to equity ratio exhibited significant volatility. It rose sharply from an initial 3.3 in late 2018 to a pronounced peak of 12.47 in the second quarter of 2020, suggesting a heavy reliance on debt relative to equity at that time. Subsequently, the ratio declined steadily through 2021 and into early 2023, reaching values close to 5, reflecting an improvement in the balance between debt and equity. In the latest quarters, the ratio rose again, fluctuating between approximately 5 and 6.4, signaling a moderate increase in leverage. These trends highlight a considerable increase in financial leverage during 2020, followed by gradual deleveraging and some renewed borrowing in the most recent period.

Total debt (including operating lease liability)

The total debt exhibits notable fluctuations over the observed periods. Initially, it remains relatively stable around the 8,000 to 9,500 million US$ range until the end of 2019. Starting in early 2020, there is a marked increase, peaking at 15,078 million US$ in June 2020. Subsequently, there is a gradual decline with occasional fluctuations, settling around 12,945 to 13,120 million US$ towards the mid-2024 periods.

Shareholders’ equity

Shareholders’ equity shows a generally downward trend from late 2018 through mid-2020, reaching its lowest point at 1,159 million US$ in June 2020. Post mid-2020, equity values recover gradually, peaking at 2,404 million US$ by late 2023, before experiencing a slight decrease in early 2024. This recovery indicates improving net asset value after a period of decline coinciding with increased debt levels.

Debt to equity ratio (including operating lease liability)

The debt to equity ratio demonstrates considerable volatility. It rises sharply from a range near 3.3 to over 4 by the end of 2018, then spikes dramatically to a maximum of 13.01 in June 2020, aligning with the peak in total debt and trough in equity. Following this peak, the ratio declines steadily along with the stabilization of debt and recovery in equity, reaching levels near 5.39 to 6.96 by mid-2024. Despite this reduction, the ratio remains elevated compared to pre-2020 levels, indicating a comparatively higher leverage position in recent periods.

Overall insights

The data reveals a significant capital structure shift around early 2020 characterized by increased leverage, rising debt levels, and a decline in shareholders’ equity. This may reflect strategic financing decisions or external pressures during that timeframe. A subsequent period of deleveraging and equity recovery is observed, suggesting measures toward financial stabilization. However, the sustained higher debt-to-equity ratio relative to earlier periods suggests ongoing elevated financial risk or capital structure adjustment.

The financial data for the company over multiple quarters reveals notable trends in total debt, total capital, and the debt-to-capital ratio.

Total Debt

Total debt showed relative stability from late 2018 through mid-2019, fluctuating around the $8.1 billion to $8.9 billion range. Beginning in early 2020, total debt increased significantly, peaking around $14.4 billion by the second quarter of 2020. Following this, debt levels declined steadily through 2021 and 2022, stabilizing between approximately $10.4 billion and $11.1 billion in the most recent quarters. Notwithstanding some increases in early 2024, the overall trend shows an initial sharp rise due to likely external pressures around early 2020, followed by a gradual reduction and stabilization in subsequent periods.

Total Capital

Total capital mirrored some of the debt trends, starting near $11.3 billion in late 2018 and maintaining a fairly consistent trajectory through 2019. There was a marked increase in early 2020, peaking near $15.6 billion in the second quarter of 2020. After this peak, total capital decreased, moving downward through 2021 and 2022 and fluctuating around $12 billion in late 2022 and early 2023. Recent quarters show a moderate rise and then slight decline, indicating some volatility but generally lower capital levels than the 2020 peak.

Debt to Capital Ratio

The debt-to-capital ratio reflects the proportion of debt financing relative to total capital. Initially, this ratio hovered between 0.77 and 0.80 before 2020, indicating that debt comprised approximately 77% to 80% of total capital. From early 2020 onward, the ratio increased sharply, reaching a high of about 0.93 in the second quarter of 2020. This suggests a significantly higher reliance on debt during that period. Subsequently, the ratio declined gradually, stabilizing in the range of 0.83 to 0.90 in recent quarters. The persistence of a comparatively high debt-to-capital ratio throughout indicates a continued strategy or necessity for substantial debt financing in the capital structure.

In summary, the company experienced a notable increase in debt and capital early in 2020, which corresponded with an elevated debt-to-capital ratio, likely reflecting response measures to external economic or operational challenges. Since then, both total debt and total capital have moderated, while the debt-to-capital ratio has gradually decreased but remains elevated compared to pre-2020 levels. These patterns indicate an ongoing emphasis on debt financing alongside efforts to manage capital structure stability.

Total Debt (Including Operating Lease Liability)

The total debt experienced an overall increasing trend from late 2018 through mid-2020, rising significantly from 8,702 million USD in September 2018 to a peak of 15,078 million USD in June 2020. After mid-2020, total debt generally declined with some fluctuations, decreasing to 11,698 million USD by December 2023, before slightly rising again to 13,120 million USD in March 2024 and then slightly falling to 12,945 million USD by June 2024. This pattern suggests a substantial increase in leverage during the early COVID-19 pandemic period, followed by efforts to reduce debt levels in subsequent periods.

Total Capital (Including Operating Lease Liability)

Total capital followed a somewhat similar pattern, initially fluctuating modestly around 11,000 million USD in late 2018 and early 2019, then rising sharply to reach a high of 16,236 million USD in June 2020. From mid-2020 onwards, total capital showed a gradual decline, moving down to approximately 13,824 million USD by late 2023, with a slight rebound to 15,373 million USD in March 2024 before decreasing to 14,805 million USD by June 2024. These changes mirror the movements observed in total debt, indicating adjustments in financing structure and overall capital base influenced by market or operational conditions.

Debt to Capital Ratio (Including Operating Lease Liability)

The debt to capital ratio remained relatively high throughout the period, starting at 0.77 in September 2018 and rising to a peak of 0.93 in June 2020. This peak corresponds to the period of highest debt and capital levels, indicating increased reliance on debt financing relative to total capital. Post mid-2020, the ratio showed a gradual decline and then stabilized around 0.85 to 0.88 in the most recent quarters up to June 2024. This suggests an improvement in the capital structure with a reduction in debt proportion relative to total capital after the peak, reflecting a move towards deleveraging or better capital management over time.

Overall Insights

The period analyzed reveals a significant leverage increase during the onset and height of the COVID-19 pandemic, with both total debt and total capital rising markedly by mid-2020. Following this, both metrics moderated downward, indicating efforts to manage and reduce leverage. The debt to capital ratio's peak and subsequent decline underscores this shift in capital structure strategy, moving from a higher leverage stance to a more balanced financing mix in recent quarters. Consistent fluctuations highlight the dynamic nature of the financial strategy responding to external economic pressures and possibly operational needs.

Total Debt

The total debt exhibits an overall upward trend from late 2018 through mid-2020, increasing from approximately $8.7 billion to a peak near $14.4 billion. Beginning in late 2020, total debt declines gradually to levels around $10.4 billion by mid-2023. However, in the subsequent quarters, debt registers a modest increase, reaching just over $12.2 billion by mid-2024. This pattern suggests a period of significant borrowing or debt accumulation up to mid-2020, followed by debt reduction efforts, and then a renewed, though more measured, borrowing trend.

Total Assets

Total assets remain relatively stable from late 2018 through mid-2019, fluctuating between roughly $18.2 billion and $19.4 billion. Starting in late 2019, a pronounced growth phase occurs, with assets peaking near $22.7 billion by late 2020. After this peak, asset levels fluctuate slightly but generally maintain a higher base, oscillating approximately between $21.4 billion and $22.8 billion up to mid-2023. From late 2023 to mid-2024, assets continue to increase modestly, reaching near $24.9 billion. This indicates steady asset expansion over the observed period, with some stabilization during 2021-2023 and resumed growth in the most recent quarters.

Debt to Assets Ratio

The debt to assets ratio remains fairly consistent around 0.46 to 0.48 from late 2018 through mid-2019, before spiking notably in early 2020 and reaching a high of approximately 0.64 mid-2020. This increase corresponds with the period of elevated debt levels relative to assets. Following this peak, the ratio declines steadily through 2021, reaching near 0.48 by mid-2023, indicating deleveraging or improved asset base relative to debt. Nonetheless, the ratio exhibits slight increases in late 2023 and into 2024, stabilizing around 0.48-0.49, suggesting that the company maintains a moderate leverage position with some variability recently.

Total Debt (Including Operating Lease Liability)

The total debt demonstrated an overall upward trend from September 2018 through mid-2020, starting at $8.7 billion and peaking at approximately $15.1 billion by June 2020. Following this peak, debt levels decreased moderately reaching a low around $11.2 billion in mid-2023. Subsequently, there was a gradual increase again towards the end of the most recent period, ending near $13 billion in mid-2024.

Total Assets

Total assets exhibited moderate fluctuations without a clear long-term directional trend over the analyzed periods. Values ranged from approximately $18.5 billion in late 2018, peaking near $24.7 billion by early 2024. The most notable increase occurred from late 2019 through mid-2020, coinciding with the period of increased debt. After transient declines in some quarters, assets maintained a relatively stable level in the $22 billion to $24 billion range in the latter periods.

Debt to Assets Ratio (Including Operating Lease Liability)

The debt to assets ratio increased significantly between late 2018 and mid-2020, rising from 0.47 to a peak of 0.67 in June 2020. This sharp increase reflects a proportionally higher debt increase relative to assets in that period. Following this peak, the ratio declined steadily, stabilizing in the 0.52 to 0.55 range from 2021 onwards, indicating a more balanced capital structure. Minor fluctuations occurred in recent quarters, but the ratio remained below the mid-2020 peak.

Overall Analysis

The data suggests a period of significant leverage increase up to mid-2020, potentially associated with external factors necessitating higher financing or investment. The subsequent reduction in debt levels and the debt to assets ratio indicates efforts to deleverage or stabilize financial risk. Asset growth was relatively moderate and episodic, with no marked decline despite fluctuations in debt, signifying maintained asset base strength. The company's financial leverage remained elevated but more controlled after mid-2020, reflecting a cautious approach to managing capital structure during the most recent periods.

Total Assets

Total assets demonstrate a generally increasing trend over the period analyzed. Starting at $18,542 million in late September 2018, the figure shows modest fluctuations through 2019, followed by a notable rise reaching $22,628 million by late June 2020. After a period of slight decline and stability around the early 2021 timeframe, assets gradually increased again from $22,103 million in October 2021 to $24,917 million by late June 2024. This trend suggests overall growth in the company’s asset base across the span of nearly six years.

Shareholders’ Equity

Shareholders’ equity fluctuates considerably throughout the analyzed quarters. Initially registering at $2,639 million in September 2018, equity fell sharply below the $2,000 million mark by mid-2020, reaching a low of $1,159 million in late June 2020. Following this trough, there is a recovery phase, with equity gradually increasing to a peak of $2,404 million in late March 2023. However, a decline resumes thereafter, dropping to $1,860 million by late June 2024. The volatility in equity indicates a period of financial stress around 2020 with partial recovery, but some weakening towards the most recent quarters.

Financial Leverage

Financial leverage exhibits significant variation, reflecting changes in the relationship between total assets and shareholders’ equity. The ratio begins at 7.03 in September 2018 and rises as high as 19.53 by late June 2020, indicating increased leverage during this period, likely influenced by the sharp decline in equity. Subsequent quarters show a gradual decrease in leverage to a low of 10.29 in late December 2023, suggesting deleveraging efforts or equity recovery. However, it increases again to 13.4 by late June 2024. The fluctuations in leverage correlate inversely with equity movements and point to shifting financing structures and risk profiles over time.

Earnings before interest and tax (EBIT)

The EBIT values exhibit significant volatility over the observed periods. Initially, from late 2018 through mid-2019, EBIT remained relatively strong, fluctuating between approximately 442 and 772 million US dollars. However, a sharp decline occurred in early 2020, plunging to a low of 55 million US dollars in March 2020 and further deteriorating to a negative 572 million in June 2020. This period marks a notable downturn likely influenced by external adverse conditions. Following this, EBIT gradually recovered through late 2020 and 2021, returning to levels above 500 million US dollars. Post-2021, EBIT displayed a generally upward trend with some fluctuations, reaching peaks above 1 billion US dollars in mid-2023 before slightly moderating toward mid-2024, indicating a recovery and growth phase.

Interest Expense

Interest expense remained relatively stable around 80 to 90 million US dollars during 2018 and most of 2019. A sharp increase is observed starting in late 2020, with interest expenses rising significantly to over 400 million US dollars in July 2021. Subsequently, interest costs decreased back to a range closer to historical values, fluctuating between 120 and 165 million US dollars through 2022 and mid-2024. This spike and subsequent decrease suggest a temporary increase in debt or financing costs during the mid-2021 period, followed by partial normalization.

Interest Coverage Ratio

The interest coverage ratio, indicating the ability to meet interest expenses from EBIT, largely mirrors the trends observed in EBIT and interest expenses. Early periods show healthy coverage ratios greater than 6, reflecting comfortable EBIT relative to interest obligations. However, this metric plummeted during 2020, reaching below 1 and even as low as 0.21 in March 2020, signaling difficulty in covering interest expense during this challenging interval. Thereafter, a gradual recovery occurs with coverage ratios improving steadily from late 2020 through mid-2024, reaching values around 5, implying an enhanced capacity to service debt and improved financial stability.

Summary of Trends

Overall, the data reveals a pronounced dip in operating profitability and financial health during early to mid-2020, likely corresponding to cyclical or extraordinary events. EBIT and interest coverage were significantly impacted, and interest expenses showed an unusual spike shortly afterward. Following this period, there is a clear recovery trajectory marked by growth in EBIT and stabilization of interest expenses, leading to improved interest coverage ratios. The latter periods suggest strengthening financial performance and improved debt servicing ability, reflecting a positive turnaround in the company's operational and financial conditions.