CarMax Inc (KMX)

Debt-to-capital ratio

		Feb 29, 2024	Nov 30, 2023	Aug 31, 2023	May 31, 2023	Feb 28, 2023	Nov 30, 2022	Aug 31, 2022	May 31, 2022	Feb 28, 2022	Nov 30, 2021	Aug 31, 2021	May 31, 2021	Feb 28, 2021	Nov 30, 2020	Aug 31, 2020	May 31, 2020	Feb 29, 2020	Nov 30, 2019	Aug 31, 2019	May 31, 2019
Long-term debt	US$ in thousands	1,602,360	1,605,640	1,608,720	1,906,500	1,909,360	1,903,220	2,511,420	2,569,750	3,255,300	2,602,600	2,190,420	1,320,210	1,322,420	1,319,500	1,896,780	1,693,890	1,778,670	1,704,280	1,689,080	1,573,870
Total stockholders’ equity	US$ in thousands	6,073,740	6,044,360	6,005,660	5,823,170	5,613,080	5,487,570	5,414,230	5,400,640	5,235,440	5,109,800	4,915,180	4,703,480	4,364,610	4,128,480	3,982,560	3,578,310	3,768,880	3,698,050	3,611,560	3,452,760
Debt-to-capital ratio		0.21	0.21	0.21	0.25	0.25	0.26	0.32	0.32	0.38	0.34	0.31	0.22	0.23	0.24	0.32	0.32	0.32	0.32	0.32	0.31

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 for CarMax Inc has been relatively stable over the past few quarters, averaging around 0.29. This indicates that, on average, approximately 29% of the company's capital is financed through debt.

Looking at the trend, there was a slight increase in the ratio from May 2021 to August 2022, where it peaked at 0.38 before gradually decreasing to 0.21 by November 2023. This drop suggests a reduction in the proportion of debt in the company's capital structure during this period.

Overall, the consistent and moderate levels of the debt-to-capital ratio indicate that CarMax Inc has a balanced approach to financing its operations, utilizing a mix of debt and equity to fund its activities. However, it is essential to monitor any significant deviations in the ratio in subsequent periods to assess potential changes in the company's leverage and financial risk.