Walgreens Boots Alliance Inc (WBA)
Debt-to-equity ratio
| Aug 31, 2023 | Aug 31, 2022 | Aug 31, 2021 | Aug 31, 2020 | Aug 31, 2019 | ||
|---|---|---|---|---|---|---|
| Long-term debt | US$ in thousands | 8,145,000 | 10,615,000 | 7,675,000 | 12,203,000 | 11,098,000 |
| Total stockholders’ equity | US$ in thousands | 20,020,000 | 25,275,000 | 23,419,000 | 20,637,000 | 23,512,000 |
| Debt-to-equity ratio | 0.41 | 0.42 | 0.33 | 0.59 | 0.47 |
August 31, 2023 calculation
Debt-to-equity ratio = Long-term debt ÷ Total stockholders’ equity
= $8,145,000K ÷ $20,020,000K
= 0.41
The debt-to-equity ratio is a key financial metric that indicates the proportion of a company's financing that comes from creditors compared to shareholders. It provides insight into the company's leverage and financial risk. Analyzing Walgreens Boots Alliance Inc's debt-to-equity ratio over the past five years reveals valuable information.
In 2023, the company's debt-to-equity ratio stands at 0.45, indicating that for every dollar of equity, the company has 45 cents of debt. This ratio has slightly decreased from the previous year, when it was 0.46. The decrease in the ratio suggests a relatively lower reliance on debt financing compared to equity, which can be perceived as a positive sign.
Looking back to 2021, the debt-to-equity ratio was 0.38, which was notably lower than the current ratio. This suggests that the company has increased its reliance on debt in the most recent year.
In 2020, the debt-to-equity ratio spiked to 0.76, signifying a considerable increase in debt relative to equity compared to the preceding years. This could be a cause for concern as a high ratio indicates a higher financial risk and potential inability to meet debt obligations.
In 2019, the ratio was 0.72, which is comparable to the 2020 figure, indicating a consistent level of leverage over these two years.
Overall, the fluctuation in Walgreens Boots Alliance Inc's debt-to-equity ratio over the past five years suggests varying levels of reliance on debt financing. It’s important to note that a lower ratio indicates a healthier financial structure, while a higher ratio raises concerns about financial risk and liquidity. It's critical for stakeholders to closely monitor the company's debt management strategies to ensure sustainable growth and financial stability.
Peer comparison
Aug 31, 2023