CarMax Inc (KMX)

Debt-to-equity 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-equity ratio		0.26	0.34	0.62	0.30	0.47

February 29, 2024 calculation

Debt-to-equity ratio = Long-term debt ÷ Total stockholders’ equity
= $1,602,360K ÷ $6,073,740K
= 0.26

The debt-to-equity ratio of CarMax Inc has fluctuated over the past five years. In the most recent year-ending Feb 29, 2024, the ratio stood at 0.26, indicating a conservative capital structure with relatively low levels of debt compared to equity. This suggests that CarMax has a strong equity base to support its operations and growth.

In the preceding years, the trend shows some variability. In Feb 28, 2023, the ratio increased to 0.34, reflecting a higher proportion of debt in the capital structure compared to the previous year. This trend continued in Feb 28, 2022, where the ratio peaked at 0.62, indicating a substantial reliance on debt financing. However, the ratio decreased significantly in the subsequent year (Feb 28, 2021) to 0.30, suggesting a reduction in debt levels or an increase in equity.

Looking back at Feb 29, 2020, the ratio was at 0.47, indicating a moderate level of leverage at that time. Overall, the fluctuation in the debt-to-equity ratio suggests that CarMax has actively managed its capital structure over the years, potentially adjusting its leverage to align with business needs, growth opportunities, and market conditions.