CarMax Inc (KMX)
Debt-to-capital ratio
| Feb 29, 2024 | Feb 28, 2023 | Feb 28, 2022 | Feb 28, 2021 | Feb 29, 2020 | ||
|---|---|---|---|---|---|---|
| Long-term debt | US$ in thousands | 1,602,360 | 1,909,360 | 3,255,300 | 1,322,420 | 1,778,670 |
| Total stockholders’ equity | US$ in thousands | 6,073,740 | 5,613,080 | 5,235,440 | 4,364,610 | 3,768,880 |
| Debt-to-capital ratio | 0.21 | 0.25 | 0.38 | 0.23 | 0.32 |
February 29, 2024 calculation
Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $1,602,360K ÷ ($1,602,360K + $6,073,740K)
= 0.21
The debt-to-capital ratio of CarMax Inc has shown fluctuations over the past five years, indicating changes in the company's capital structure. In February 2024, the ratio was reported at 0.21, representing a decrease from the prior year's ratio of 0.25. This suggests that CarMax's reliance on debt relative to its total capital decreased, potentially indicating improved financial stability and reduced financial risk.
Comparing the current ratio to the ratios from previous years, there is a clear trend of improvement in the company's debt-to-capital position since February 2022 when the ratio was at its highest level of 0.38. The significant decline in the ratio over the past two years reflects a strategic shift towards a more balanced capital structure, with a lower proportion of debt in relation to overall capital.
Overall, the downward trend in CarMax Inc's debt-to-capital ratio suggests a positive shift towards a healthier financial position, potentially enhancing the company's ability to meet its obligations and withstand financial challenges.
Peer comparison
Feb 29, 2024