CarMax Inc (KMX)
Financial leverage 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 27,196,800 | 27,173,200 | 27,300,200 | 26,962,400 | 26,182,700 | 25,938,900 | 26,470,500 | 26,338,700 | 26,338,300 | 25,575,200 | 24,453,300 | 22,832,900 | 21,541,500 | 20,932,800 | 21,246,300 | 19,972,500 | 21,082,200 | 20,487,200 | 20,140,300 | 19,714,500 |
| 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 |
| Financial leverage ratio | 4.48 | 4.50 | 4.55 | 4.63 | 4.66 | 4.73 | 4.89 | 4.88 | 5.03 | 5.01 | 4.98 | 4.85 | 4.94 | 5.07 | 5.33 | 5.58 | 5.59 | 5.54 | 5.58 | 5.71 |
February 29, 2024 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $27,196,800K ÷ $6,073,740K
= 4.48
The financial leverage ratio of CarMax Inc has been fluctuating over the periods provided, ranging from 4.48 to 5.71. The higher values of the ratio indicate that the company relies more on debt financing to fund its operations and growth, relative to its equity. This implies higher financial risk due to increased debt obligations which need to be serviced.
It is noteworthy that the trend of the financial leverage ratio has been generally increasing over time, suggesting a growing reliance on debt to support the company's activities. Investors and creditors may monitor this trend closely as it could impact the company's ability to meet its debt obligations in the long run.
Furthermore, a higher financial leverage ratio can also potentially lead to higher interest expenses, reducing the company's profitability and financial flexibility. It is crucial for CarMax Inc to carefully manage its debt levels and monitor its leverage ratio to ensure sustainable growth and financial stability.
Peer comparison
Feb 29, 2024