Walgreens Boots Alliance Inc (WBA)
Solvency ratios
| Aug 31, 2024 | Aug 31, 2023 | Aug 31, 2022 | Aug 31, 2021 | Aug 31, 2020 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.10 | 0.08 | 0.12 | 0.09 | 0.14 |
| Debt-to-capital ratio | 0.44 | 0.29 | 0.30 | 0.25 | 0.37 |
| Debt-to-equity ratio | 0.77 | 0.41 | 0.42 | 0.33 | 0.59 |
| Financial leverage ratio | 7.76 | 4.83 | 3.57 | 3.47 | 4.22 |
The solvency ratios of Walgreens Boots Alliance Inc have shown varying trends over the past five years, indicating the company's ability to meet its long-term financial obligations.
- Debt-to-assets ratio: The company's debt-to-assets ratio has fluctuated between 0.08 and 0.14 over the past five years, with a decreasing trend from 2020 to 2023, followed by an increase in 2024. A lower debt-to-assets ratio indicates that the company relies less on debt financing to support its assets.
- Debt-to-capital ratio: Walgreens Boots Alliance Inc's debt-to-capital ratio has ranged from 0.25 to 0.44 during the same period. This ratio reflects the proportion of the company's capital that is financed through debt. The increasing trend in this ratio signifies a greater reliance on debt to fund the company's operations.
- Debt-to-equity ratio: The debt-to-equity ratio has shown significant fluctuations, ranging from 0.33 to 0.77. A higher ratio indicates higher financial risk due to increased debt relative to equity. The ratio peaked in 2024, suggesting a higher level of debt compared to equity in that year.
- Financial leverage ratio: The financial leverage ratio has fluctuated between 3.47 and 7.76 over the five-year period. This ratio measures the company's reliance on debt to finance its operations. A higher financial leverage ratio indicates that the company is using more debt to support its assets and operations.
Overall, the solvency ratios of Walgreens Boots Alliance Inc show that the company has experienced changes in its debt levels and financial structure over the past five years. Investors and stakeholders should continue to monitor these ratios to assess the company's long-term financial health and risk management strategies.
Coverage ratios
| Aug 31, 2024 | Aug 31, 2023 | Aug 31, 2022 | Aug 31, 2021 | Aug 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | -14.33 | -7.51 | 11.77 | 4.55 | 2.30 |
The interest coverage ratio for Walgreens Boots Alliance Inc has been fluctuating over the past five years. In 2024, the interest coverage ratio was significantly negative at -14.33, indicating that the company's operating income was insufficient to cover its interest expenses.
The trend in the interest coverage ratio shows a decline from 2021 to 2024, with the ratio dropping from a positive 4.55 to a highly negative -14.33. This suggests a deteriorating ability of the company to meet its interest obligations with its operating income.
The negative interest coverage ratios in 2024 and 2023 are concerning as they indicate that the company's earnings before interest and taxes (EBIT) were insufficient to cover its interest expenses during those periods. This could signal potential financial distress or liquidity constraints for Walgreens Boots Alliance Inc.
On the other hand, the positive interest coverage ratios in 2022 and 2021 indicate that the company had adequate earnings to cover its interest costs during those years. However, the downward trend in the interest coverage ratio over the years raises questions about the company's financial health and ability to service its debt.
Overall, the analysis of Walgreens Boots Alliance Inc's interest coverage ratio suggests a recent and significant deterioration in its ability to cover interest expenses with operating income, highlighting a potential risk factor for investors and creditors.