Analysis of Solvency Ratios
Solvency ratios also known as long-term debt ratios measure a company ability to meet long-term obligations.
Solvency Ratios (Summary)
Dollar Tree Inc., solvency ratios
Based on: 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03), 10-K (reporting date: 2017-01-28).
- Debt to Equity
- The debt to equity ratio demonstrates a consistent downward trend from 1.17 in early 2017 to 0.44 in early 2022, indicating a reduction in reliance on debt relative to equity. However, when including operating lease liabilities, there is a marked increase starting in 2020, rising sharply to 1.6 and then declining slightly to 1.29 by 2022. This suggests that operating leases have become a significant component of the company’s obligations, partially offsetting the improvement observed in traditional debt metrics.
- Debt to Capital
- Debt to capital ratios follow a similar decreasing pattern from 0.54 in 2017 to 0.31 in 2022. This reflects a strengthening capital structure with less debt proportionate to total capital. Including operating lease liabilities reveals a contrasting trend: a spike from 0.43 in 2019 to 0.62 in 2020, then a mild reduction to 0.56 by 2022, indicating increased financial commitment through operating leases affecting overall capital structure assessment.
- Debt to Assets
- The debt to assets ratio exhibits a gradual decline from 0.40 in 2017 to 0.16 in 2022, indicating that debt forms a smaller fraction of the company’s asset base over time. However, the inclusion of operating lease liabilities shows a substantial rise from 0.32 in 2019 to 0.51 in 2020 and a slight decrease thereafter. This points to a significant impact of operating leases on the leverage against assets, notably increasing overall liabilities in recent periods.
- Financial Leverage
- Financial leverage ratios exhibit fluctuations, decreasing from 2.91 in 2017 to 2.27 in 2018, then increasing to 3.13 in 2020, followed by a moderate decline to 2.81 in 2022. This variability reflects changes in the company’s use of debt relative to equity to finance its assets, with a notable peak in 2020 suggesting increased leverage during that period.
- Interest Coverage
- The interest coverage ratio shows improvement over the timeframe, beginning at 4.54 in 2017 and peaking at 12.81 in 2021, before a slight decline to 10.12 in 2022. An anomalous negative figure is recorded in 2019 (-2.54), indicating a temporary inability to cover interest expenses from operating earnings during that year. The overall trend, despite this outlier, suggests enhanced capability to service interest obligations.
- Fixed Charge Coverage
- This ratio trends upward from 1.80 in 2017 to 2.02 in 2021, with some volatility, especially noted in 2019 where coverage dropped notably to 0.26, indicating a significant shortfall in covering fixed charges at that time. The ratio then recovers to 1.92 in 2022, showing improvement but with persistent variability, suggesting fluctuating ability to meet fixed financial commitments consistently.
Debt Ratios
Coverage Ratios
Debt to Equity
Dollar Tree Inc., debt to equity calculation, comparison to benchmarks
| Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | Feb 2, 2019 | Feb 3, 2018 | Jan 28, 2017 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Current portion of long-term debt | —) | —) | 250,000) | —) | 915,900) | 152,100) | |
| Long-term debt, net, excluding current portion | 3,417,000) | 3,226,200) | 3,522,200) | 4,265,300) | 4,762,100) | 6,169,700) | |
| Total debt | 3,417,000) | 3,226,200) | 3,772,200) | 4,265,300) | 5,678,000) | 6,321,800) | |
| Shareholders’ equity | 7,718,500) | 7,285,300) | 6,254,800) | 5,642,900) | 7,182,300) | 5,389,500) | |
| Solvency Ratio | |||||||
| Debt to equity1 | 0.44 | 0.44 | 0.60 | 0.76 | 0.79 | 1.17 | |
| Benchmarks | |||||||
| Debt to Equity, Competitors2 | |||||||
| Costco Wholesale Corp. | 0.40 | 0.49 | 0.45 | 0.48 | — | — | |
| Target Corp. | 1.07 | 0.88 | 0.97 | — | — | — | |
| Walmart Inc. | 0.51 | 0.60 | 0.73 | — | — | — | |
| Debt to Equity, Sector | |||||||
| Consumer Staples Distribution & Retail | 0.55 | 0.62 | 0.71 | — | — | — | |
| Debt to Equity, Industry | |||||||
| Consumer Staples | 1.08 | 1.07 | 1.24 | — | — | — | |
Based on: 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03), 10-K (reporting date: 2017-01-28).
1 2022 Calculation
Debt to equity = Total debt ÷ Shareholders’ equity
= 3,417,000 ÷ 7,718,500 = 0.44
2 Click competitor name to see calculations.
- Total Debt
- The total debt of the company showed a consistent downward trend from January 28, 2017, to January 30, 2021. It decreased steadily from 6,321,800 thousand USD in early 2017 to 3,226,200 thousand USD by early 2021. However, in the following year ending January 29, 2022, there was a slight increase in debt to 3,417,000 thousand USD after this period of decline.
- Shareholders’ Equity
- Shareholders’ equity experienced fluctuations but generally exhibited an upward movement over the analysis period. Starting at 5,389,500 thousand USD in January 2017, it rose significantly to 7,182,300 thousand USD by early 2018, then decreased to 5,642,900 thousand USD in early 2019. From 2019 onward, equity increased steadily to reach 7,718,500 thousand USD by early 2022, indicating an overall growth in the company’s net asset base.
- Debt to Equity Ratio
- The debt to equity ratio presented a consistent decreasing trend throughout the period. It declined from 1.17 in early 2017 to 0.44 by early 2021 and remained stable at 0.44 through early 2022. This trend denotes a reduction in leverage and an improvement in the capital structure, reflecting a lower proportion of debt relative to equity over time.
Debt to Equity (including Operating Lease Liability)
Dollar Tree Inc., debt to equity (including operating lease liability) calculation, comparison to benchmarks
| Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | Feb 2, 2019 | Feb 3, 2018 | Jan 28, 2017 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Current portion of long-term debt | —) | —) | 250,000) | —) | 915,900) | 152,100) | |
| Long-term debt, net, excluding current portion | 3,417,000) | 3,226,200) | 3,522,200) | 4,265,300) | 4,762,100) | 6,169,700) | |
| Total debt | 3,417,000) | 3,226,200) | 3,772,200) | 4,265,300) | 5,678,000) | 6,321,800) | |
| Current portion of operating lease liabilities | 1,407,800) | 1,348,200) | 1,279,300) | —) | —) | —) | |
| Operating lease liabilities, long-term | 5,145,500) | 5,065,500) | 4,979,500) | —) | —) | —) | |
| Total debt (including operating lease liability) | 9,970,300) | 9,639,900) | 10,031,000) | 4,265,300) | 5,678,000) | 6,321,800) | |
| Shareholders’ equity | 7,718,500) | 7,285,300) | 6,254,800) | 5,642,900) | 7,182,300) | 5,389,500) | |
| Solvency Ratio | |||||||
| Debt to equity (including operating lease liability)1 | 1.29 | 1.32 | 1.60 | 0.76 | 0.79 | 1.17 | |
| Benchmarks | |||||||
| Debt to Equity (including Operating Lease Liability), Competitors2 | |||||||
| Costco Wholesale Corp. | 0.53 | 0.65 | 0.61 | 0.48 | — | — | |
| Target Corp. | 1.28 | 1.05 | 1.18 | — | — | — | |
| Walmart Inc. | 0.69 | 0.78 | 0.97 | — | — | — | |
| Debt to Equity (including Operating Lease Liability), Sector | |||||||
| Consumer Staples Distribution & Retail | 0.73 | 0.79 | 0.93 | — | — | — | |
| Debt to Equity (including Operating Lease Liability), Industry | |||||||
| Consumer Staples | 1.20 | 1.19 | 1.39 | — | — | — | |
Based on: 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03), 10-K (reporting date: 2017-01-28).
1 2022 Calculation
Debt to equity (including operating lease liability) = Total debt (including operating lease liability) ÷ Shareholders’ equity
= 9,970,300 ÷ 7,718,500 = 1.29
2 Click competitor name to see calculations.
- Total Debt (Including Operating Lease Liability)
- The total debt exhibited a decreasing trend from January 28, 2017, at approximately $6.32 billion to a low of about $4.27 billion by February 2, 2019. This downward movement was followed by a significant increase peaking at around $10.03 billion on February 1, 2020. Subsequently, the debt level saw a modest decrease and stabilization, standing at roughly $9.64 billion by January 30, 2021, and slightly rising again to about $9.97 billion as of January 29, 2022.
- Shareholders' Equity
- The equity balance demonstrated an initial increase from approximately $5.39 billion in early 2017 to about $7.18 billion by early 2018. Thereafter, it declined to roughly $5.64 billion in early 2019 before gradually recovering and rising to approximately $7.72 billion by early 2022. This pattern suggests periods of reinvestment or earnings retention following a brief contraction.
- Debt to Equity Ratio (Including Operating Lease Liability)
- The debt to equity ratio declined from 1.17 in January 2017 to 0.76 by early 2019, reflecting a strengthening equity base relative to debt or a reduction in leverage. However, this trend reversed sharply by early 2020 where the ratio increased to 1.6, indicating a significant rise in leverage consistent with the noted increase in total debt. In the subsequent periods, the ratio moderately decreased but remained elevated above previous lows, at 1.32 and 1.29 in 2021 and 2022, respectively, signaling sustained higher leverage levels compared to the earlier part of the period analyzed.
Debt to Capital
Dollar Tree Inc., debt to capital calculation, comparison to benchmarks
| Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | Feb 2, 2019 | Feb 3, 2018 | Jan 28, 2017 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Current portion of long-term debt | —) | —) | 250,000) | —) | 915,900) | 152,100) | |
| Long-term debt, net, excluding current portion | 3,417,000) | 3,226,200) | 3,522,200) | 4,265,300) | 4,762,100) | 6,169,700) | |
| Total debt | 3,417,000) | 3,226,200) | 3,772,200) | 4,265,300) | 5,678,000) | 6,321,800) | |
| Shareholders’ equity | 7,718,500) | 7,285,300) | 6,254,800) | 5,642,900) | 7,182,300) | 5,389,500) | |
| Total capital | 11,135,500) | 10,511,500) | 10,027,000) | 9,908,200) | 12,860,300) | 11,711,300) | |
| Solvency Ratio | |||||||
| Debt to capital1 | 0.31 | 0.31 | 0.38 | 0.43 | 0.44 | 0.54 | |
| Benchmarks | |||||||
| Debt to Capital, Competitors2 | |||||||
| Costco Wholesale Corp. | 0.28 | 0.33 | 0.31 | 0.32 | — | — | |
| Target Corp. | 0.52 | 0.47 | 0.49 | — | — | — | |
| Walmart Inc. | 0.34 | 0.38 | 0.42 | — | — | — | |
| Debt to Capital, Sector | |||||||
| Consumer Staples Distribution & Retail | 0.36 | 0.38 | 0.41 | — | — | — | |
| Debt to Capital, Industry | |||||||
| Consumer Staples | 0.52 | 0.52 | 0.55 | — | — | — | |
Based on: 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03), 10-K (reporting date: 2017-01-28).
1 2022 Calculation
Debt to capital = Total debt ÷ Total capital
= 3,417,000 ÷ 11,135,500 = 0.31
2 Click competitor name to see calculations.
The financial data indicates a consistent downward trend in total debt from January 2017 through January 2021, decreasing from approximately $6.32 billion to $3.23 billion. This decline suggests a reduction in leverage over this period. However, in January 2022, total debt experienced a slight increase to about $3.42 billion, interrupting the overall decreasing pattern.
Total capital values fluctuated over the same timeframe. After an initial increase from roughly $11.71 billion in January 2017 to $12.86 billion in February 2018, total capital decreased substantially by February 2019 to just under $9.91 billion. Subsequently, it showed a gradual increase through 2020 and 2021, reaching approximately $11.14 billion in January 2022. This rebound might be indicative of efforts to strengthen the capital base or accumulation of retained earnings.
The debt to capital ratio demonstrates a clear and steady decline throughout the period, dropping from 0.54 in January 2017 to 0.31 in January 2021, and maintaining at 0.31 in January 2022. This trend highlights an improvement in the company's capital structure, reflecting a lower proportion of debt relative to total capital, which generally implies reduced financial risk.
Overall, the data suggests significant deleveraging and capital optimization efforts over the analyzed periods, accompanied by a generally strengthening capital position despite the slight increase in debt observed in the most recent year.
Debt to Capital (including Operating Lease Liability)
Dollar Tree Inc., debt to capital (including operating lease liability) calculation, comparison to benchmarks
| Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | Feb 2, 2019 | Feb 3, 2018 | Jan 28, 2017 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Current portion of long-term debt | —) | —) | 250,000) | —) | 915,900) | 152,100) | |
| Long-term debt, net, excluding current portion | 3,417,000) | 3,226,200) | 3,522,200) | 4,265,300) | 4,762,100) | 6,169,700) | |
| Total debt | 3,417,000) | 3,226,200) | 3,772,200) | 4,265,300) | 5,678,000) | 6,321,800) | |
| Current portion of operating lease liabilities | 1,407,800) | 1,348,200) | 1,279,300) | —) | —) | —) | |
| Operating lease liabilities, long-term | 5,145,500) | 5,065,500) | 4,979,500) | —) | —) | —) | |
| Total debt (including operating lease liability) | 9,970,300) | 9,639,900) | 10,031,000) | 4,265,300) | 5,678,000) | 6,321,800) | |
| Shareholders’ equity | 7,718,500) | 7,285,300) | 6,254,800) | 5,642,900) | 7,182,300) | 5,389,500) | |
| Total capital (including operating lease liability) | 17,688,800) | 16,925,200) | 16,285,800) | 9,908,200) | 12,860,300) | 11,711,300) | |
| Solvency Ratio | |||||||
| Debt to capital (including operating lease liability)1 | 0.56 | 0.57 | 0.62 | 0.43 | 0.44 | 0.54 | |
| Benchmarks | |||||||
| Debt to Capital (including Operating Lease Liability), Competitors2 | |||||||
| Costco Wholesale Corp. | 0.35 | 0.39 | 0.38 | 0.32 | — | — | |
| Target Corp. | 0.56 | 0.51 | 0.54 | — | — | — | |
| Walmart Inc. | 0.41 | 0.44 | 0.49 | — | — | — | |
| Debt to Capital (including Operating Lease Liability), Sector | |||||||
| Consumer Staples Distribution & Retail | 0.42 | 0.44 | 0.48 | — | — | — | |
| Debt to Capital (including Operating Lease Liability), Industry | |||||||
| Consumer Staples | 0.54 | 0.54 | 0.58 | — | — | — | |
Based on: 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03), 10-K (reporting date: 2017-01-28).
1 2022 Calculation
Debt to capital (including operating lease liability) = Total debt (including operating lease liability) ÷ Total capital (including operating lease liability)
= 9,970,300 ÷ 17,688,800 = 0.56
2 Click competitor name to see calculations.
- Total Debt (including operating lease liability)
-
The total debt demonstrates a fluctuating trend over the analyzed period. Initially, there was a decline from approximately 6.32 billion USD in early 2017 to a low point near 4.27 billion USD in early 2019. Subsequently, total debt sharply increased, reaching over 10 billion USD by early 2020. After this substantial rise, the debt level slightly decreased but remained close to the 10 billion USD mark through early 2022.
- Total Capital (including operating lease liability)
-
Total capital exhibited variability during the period. Starting at roughly 11.71 billion USD in early 2017, it rose to about 12.86 billion USD by early 2018. This was followed by a significant decrease to just under 10 billion USD in early 2019. From that point, there was a marked increase, peaking near 17.69 billion USD in early 2022. The increase in total capital after early 2019 indicates a considerable expansion in the company’s financial base.
- Debt to Capital Ratio (including operating lease liability)
-
The debt to capital ratio trends correspond with the movements in debt and capital. It decreased gradually from 0.54 in early 2017 to a low of 0.43 in early 2019, reflecting an improved capital structure with lower leverage. Afterwards, the ratio increased sharply to 0.62 in early 2020, indicating a higher reliance on debt financing. The ratio then declined modestly to around 0.56 by early 2022, showing a slight reduction in leverage but remaining elevated compared to the pre-2020 period.
- Summary Insights
-
The financial data indicates that the company reduced its debt considerably up to early 2019 but subsequently increased borrowing significantly by early 2020. The rapid increase in total debt coincided with a substantial rise in total capital, suggesting growth possibly funded by increased leverage. The debt to capital ratio highlights a shift from a more conservative capital structure before 2020 to a more leveraged position afterward. This may imply strategic financing decisions, perhaps to support expansion or respond to market conditions, resulting in increased financial risk relative to the earlier period.
Debt to Assets
Dollar Tree Inc., debt to assets calculation, comparison to benchmarks
| Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | Feb 2, 2019 | Feb 3, 2018 | Jan 28, 2017 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Current portion of long-term debt | —) | —) | 250,000) | —) | 915,900) | 152,100) | |
| Long-term debt, net, excluding current portion | 3,417,000) | 3,226,200) | 3,522,200) | 4,265,300) | 4,762,100) | 6,169,700) | |
| Total debt | 3,417,000) | 3,226,200) | 3,772,200) | 4,265,300) | 5,678,000) | 6,321,800) | |
| Total assets | 21,721,800) | 20,696,000) | 19,574,600) | 13,501,200) | 16,332,800) | 15,701,600) | |
| Solvency Ratio | |||||||
| Debt to assets1 | 0.16 | 0.16 | 0.19 | 0.32 | 0.35 | 0.40 | |
| Benchmarks | |||||||
| Debt to Assets, Competitors2 | |||||||
| Costco Wholesale Corp. | 0.13 | 0.14 | 0.15 | 0.16 | — | — | |
| Target Corp. | 0.25 | 0.25 | 0.27 | — | — | — | |
| Walmart Inc. | 0.17 | 0.19 | 0.23 | — | — | — | |
| Debt to Assets, Sector | |||||||
| Consumer Staples Distribution & Retail | 0.18 | 0.19 | 0.22 | — | — | — | |
| Debt to Assets, Industry | |||||||
| Consumer Staples | 0.30 | 0.30 | 0.33 | — | — | — | |
Based on: 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03), 10-K (reporting date: 2017-01-28).
1 2022 Calculation
Debt to assets = Total debt ÷ Total assets
= 3,417,000 ÷ 21,721,800 = 0.16
2 Click competitor name to see calculations.
The financial data reveals a notable evolution in the company's debt structure and asset base over the six-year period from early 2017 to early 2022.
- Total Debt
- The total debt exhibited a consistent downward trend from 2017 through 2021, decreasing from approximately $6.32 billion to $3.23 billion. However, there was a slight increase in 2022, with total debt rising to about $3.42 billion. This reduction over time suggests a strategic effort to deleverage, possibly to improve financial stability or creditworthiness, although the modest uptick in the final year indicates a change in this approach or new financing requirements.
- Total Assets
- Total assets showed fluctuations but an overall increasing pattern. After a slight increase from 2017 to 2018, assets declined sharply in 2019 to roughly $13.5 billion. Subsequently, the company reversed this decline and expanded its asset base significantly in 2020, reaching nearly $19.6 billion, and continued growing through 2021 and 2022, ending at approximately $21.7 billion. This recovery and growth in assets might reflect acquisitions, capital expenditures, or improved operational scaling.
- Debt to Assets Ratio
- The debt-to-assets ratio decreased consistently from 0.40 in 2017 to 0.16 by 2021, signaling a substantial reduction in leverage relative to asset size. In 2022, this ratio remained steady at 0.16 despite the slight increase in total debt, suggesting that asset growth has kept pace with or exceeded debt levels. This decline in the ratio underscores a strengthened balance sheet, indicating reduced financial risk and potentially enhanced borrowing capacity or investment appeal.
Overall, the company has demonstrated disciplined debt management accompanied by asset growth, resulting in improved leverage metrics. The slight increase in debt in the latest period warrants monitoring but does not appear to compromise the favorable trend established in preceding years.
Debt to Assets (including Operating Lease Liability)
Dollar Tree Inc., debt to assets (including operating lease liability) calculation, comparison to benchmarks
| Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | Feb 2, 2019 | Feb 3, 2018 | Jan 28, 2017 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Current portion of long-term debt | —) | —) | 250,000) | —) | 915,900) | 152,100) | |
| Long-term debt, net, excluding current portion | 3,417,000) | 3,226,200) | 3,522,200) | 4,265,300) | 4,762,100) | 6,169,700) | |
| Total debt | 3,417,000) | 3,226,200) | 3,772,200) | 4,265,300) | 5,678,000) | 6,321,800) | |
| Current portion of operating lease liabilities | 1,407,800) | 1,348,200) | 1,279,300) | —) | —) | —) | |
| Operating lease liabilities, long-term | 5,145,500) | 5,065,500) | 4,979,500) | —) | —) | —) | |
| Total debt (including operating lease liability) | 9,970,300) | 9,639,900) | 10,031,000) | 4,265,300) | 5,678,000) | 6,321,800) | |
| Total assets | 21,721,800) | 20,696,000) | 19,574,600) | 13,501,200) | 16,332,800) | 15,701,600) | |
| Solvency Ratio | |||||||
| Debt to assets (including operating lease liability)1 | 0.46 | 0.47 | 0.51 | 0.32 | 0.35 | 0.40 | |
| Benchmarks | |||||||
| Debt to Assets (including Operating Lease Liability), Competitors2 | |||||||
| Costco Wholesale Corp. | 0.17 | 0.19 | 0.20 | 0.16 | — | — | |
| Target Corp. | 0.31 | 0.29 | 0.33 | — | — | — | |
| Walmart Inc. | 0.23 | 0.25 | 0.31 | — | — | — | |
| Debt to Assets (including Operating Lease Liability), Sector | |||||||
| Consumer Staples Distribution & Retail | 0.23 | 0.25 | 0.29 | — | — | — | |
| Debt to Assets (including Operating Lease Liability), Industry | |||||||
| Consumer Staples | 0.33 | 0.33 | 0.37 | — | — | — | |
Based on: 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03), 10-K (reporting date: 2017-01-28).
1 2022 Calculation
Debt to assets (including operating lease liability) = Total debt (including operating lease liability) ÷ Total assets
= 9,970,300 ÷ 21,721,800 = 0.46
2 Click competitor name to see calculations.
- Total Debt (Including Operating Lease Liability)
- The total debt level exhibited a fluctuating trend over the analyzed periods. It decreased from $6,321,800 thousand in January 2017 to $4,265,300 thousand by February 2019, representing a significant reduction. However, from 2019 onwards, the total debt escalated sharply, reaching $10,031,000 thousand in February 2020. Subsequently, it slightly declined and stabilized around $9,639,900 thousand and $9,970,300 thousand in January 2021 and January 2022, respectively.
- Total Assets
- Total assets showed variability, beginning at $15,701,600 thousand in January 2017 and increasing modestly to $16,332,800 thousand in February 2018. This was followed by a decline to $13,501,200 thousand in February 2019. After this period, a substantial increase occurred, with assets reaching $19,574,600 thousand in February 2020 and continuing to rise to $20,696,000 thousand and $21,721,800 thousand by January 2021 and January 2022, respectively.
- Debt to Assets Ratio (Including Operating Lease Liability)
- The debt to assets ratio reflected changes consistent with the movement in debt and asset levels. It started at 0.40 in January 2017 and progressively decreased to 0.32 by February 2019, indicating a reduced leverage ratio during that timeframe. Following this, the ratio increased markedly to 0.51 in February 2020, corresponding with the rise in total debt and asset base. In the subsequent years, the ratio moderated to 0.47 in January 2021 and further to 0.46 in January 2022, suggesting a slight reduction in leverage but remaining elevated compared to earlier years.
- Overall Insights
- The financial data indicates a period of debt reduction and asset contraction from 2017 to 2019, succeeded by a phase of significant borrowing and asset expansion starting in 2020. The leverage ratio trends corroborate these movements, showing reduced leverage initially and increased leverage from 2020 onwards. The stabilization of total debt and the gradual decline in the debt to assets ratio in the latest periods may suggest efforts towards managing indebtedness following a peak leveraging phase.
Financial Leverage
Dollar Tree Inc., financial leverage calculation, comparison to benchmarks
| Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | Feb 2, 2019 | Feb 3, 2018 | Jan 28, 2017 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Total assets | 21,721,800) | 20,696,000) | 19,574,600) | 13,501,200) | 16,332,800) | 15,701,600) | |
| Shareholders’ equity | 7,718,500) | 7,285,300) | 6,254,800) | 5,642,900) | 7,182,300) | 5,389,500) | |
| Solvency Ratio | |||||||
| Financial leverage1 | 2.81 | 2.84 | 3.13 | 2.39 | 2.27 | 2.91 | |
| Benchmarks | |||||||
| Financial Leverage, Competitors2 | |||||||
| Costco Wholesale Corp. | 3.11 | 3.37 | 3.04 | 2.98 | — | — | |
| Target Corp. | 4.20 | 3.55 | 3.62 | — | — | — | |
| Walmart Inc. | 2.94 | 3.12 | 3.17 | — | — | — | |
| Financial Leverage, Sector | |||||||
| Consumer Staples Distribution & Retail | 3.11 | 3.21 | 3.20 | — | — | — | |
| Financial Leverage, Industry | |||||||
| Consumer Staples | 3.59 | 3.59 | 3.76 | — | — | — | |
Based on: 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03), 10-K (reporting date: 2017-01-28).
1 2022 Calculation
Financial leverage = Total assets ÷ Shareholders’ equity
= 21,721,800 ÷ 7,718,500 = 2.81
2 Click competitor name to see calculations.
- Total assets
- The total assets experienced fluctuations over the analyzed periods. From 2017 to 2018, there was a modest increase followed by a significant decline in 2019. Subsequently, the total assets increased substantially in 2020 and continued a steady rise through 2021 and 2022, reaching the highest value by the end of the period. This pattern suggests periods of both contraction and expansion in asset holdings, with a strong recovery and growth in the latter years.
- Shareholders’ equity
- Shareholders’ equity displayed an overall upward trend despite some variability. There was a notable increase from 2017 to 2018, after which it decreased in 2019. From 2020 onward, shareholders’ equity resumed an increasing trajectory, with consistent growth observed in 2021 and 2022, culminating in the highest recorded equity value. This indicates progressive strengthening of the company’s net worth over the recent years.
- Financial leverage
- The financial leverage ratio showed fluctuations, reflecting varying reliance on debt financing relative to equity. It initially declined from 2017 to 2018, suggesting a reduction in leverage or increased equity relative to debt. However, it rose sharply in 2020, indicating a significant increase in leverage. Following this peak, the ratio decreased slightly in 2021 and 2022 but remained above the lower levels seen in 2018 and 2019. This pattern reflects changing capital structure dynamics with periods of greater leverage.
Interest Coverage
Dollar Tree Inc., interest coverage calculation, comparison to benchmarks
| Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | Feb 2, 2019 | Feb 3, 2018 | Jan 28, 2017 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Net income (loss) | 1,327,900) | 1,341,900) | 827,000) | (1,590,800) | 1,714,300) | 896,200) | |
| Add: Income tax expense | 304,300) | 397,900) | 271,700) | 281,800) | (10,300) | 433,200) | |
| Add: Interest expense, net | 178,900) | 147,300) | 162,100) | 370,000) | 301,800) | 375,500) | |
| Earnings before interest and tax (EBIT) | 1,811,100) | 1,887,100) | 1,260,800) | (939,000) | 2,005,800) | 1,704,900) | |
| Solvency Ratio | |||||||
| Interest coverage1 | 10.12 | 12.81 | 7.78 | -2.54 | 6.65 | 4.54 | |
| Benchmarks | |||||||
| Interest Coverage, Competitors2 | |||||||
| Costco Wholesale Corp. | 50.62 | 40.06 | 34.54 | 32.77 | — | — | |
| Target Corp. | 22.16 | 6.68 | 9.78 | — | — | — | |
| Walmart Inc. | 10.38 | 9.88 | 8.74 | — | — | — | |
| Interest Coverage, Sector | |||||||
| Consumer Staples Distribution & Retail | 14.77 | 10.47 | 10.17 | — | — | — | |
| Interest Coverage, Industry | |||||||
| Consumer Staples | 15.69 | 11.46 | 11.62 | — | — | — | |
Based on: 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03), 10-K (reporting date: 2017-01-28).
1 2022 Calculation
Interest coverage = EBIT ÷ Interest expense
= 1,811,100 ÷ 178,900 = 10.12
2 Click competitor name to see calculations.
- Earnings before interest and tax (EBIT)
- The EBIT shows a generally positive trend from 2017 to 2018, increasing from approximately 1.7 billion USD to 2.0 billion USD. In 2019, there is a significant decline, reflected by a negative EBIT of about -939 million USD, indicating an operational loss during that year. After this sharp downturn, EBIT recovers strongly in 2020, rising to about 1.26 billion USD. This recovery continues in 2021, reaching a peak close to 1.89 billion USD, followed by a slight decrease in 2022 to approximately 1.81 billion USD. Overall, EBIT exhibits volatility with a notable setback in 2019 but a robust rebound afterward.
- Interest expense, net
- Net interest expense fluctuates moderately over the reported period. Starting at roughly 376 million USD in 2017, the amount decreases to about 302 million USD in 2018 before increasing again to around 370 million USD in 2019. In 2020, interest expense declines considerably to near 162 million USD, continuing a downward trend in 2021 to about 147 million USD, followed by a minor increase to nearly 179 million USD in 2022. These fluctuations suggest some variability in debt levels or cost of debt, with a general decline in interest burden from 2019 onward except for the slight uptick in the last year.
- Interest coverage ratio
- The interest coverage ratio demonstrates significant variability across the years, reflecting changes in EBIT relative to interest expenses. The ratio rises from 4.54 in 2017 to 6.65 in 2018, indicating improved ability to cover interest expenses. However, in 2019, the ratio becomes negative at -2.54, consistent with the negative EBIT observed in the same year, indicating the company was unable to cover interest costs through operating earnings. Subsequently, the ratio recovers strongly to 7.78 in 2020, further improving to a high of 12.81 in 2021, highlighting a substantial increase in earnings relative to interest obligations. In 2022, the ratio decreases slightly to 10.12 but remains at a healthy level, suggesting sustained strong earnings relative to interest expenses.
Fixed Charge Coverage
Dollar Tree Inc., fixed charge coverage calculation, comparison to benchmarks
| Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | Feb 2, 2019 | Feb 3, 2018 | Jan 28, 2017 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Net income (loss) | 1,327,900) | 1,341,900) | 827,000) | (1,590,800) | 1,714,300) | 896,200) | |
| Add: Income tax expense | 304,300) | 397,900) | 271,700) | 281,800) | (10,300) | 433,200) | |
| Add: Interest expense, net | 178,900) | 147,300) | 162,100) | 370,000) | 301,800) | 375,500) | |
| Earnings before interest and tax (EBIT) | 1,811,100) | 1,887,100) | 1,260,800) | (939,000) | 2,005,800) | 1,704,900) | |
| Add: Operating lease cost | 1,602,800) | 1,551,200) | 1,520,500) | 1,404,000) | 1,343,500) | 1,276,600) | |
| Earnings before fixed charges and tax | 3,413,900) | 3,438,300) | 2,781,300) | 465,000) | 3,349,300) | 2,981,500) | |
| Interest expense, net | 178,900) | 147,300) | 162,100) | 370,000) | 301,800) | 375,500) | |
| Operating lease cost | 1,602,800) | 1,551,200) | 1,520,500) | 1,404,000) | 1,343,500) | 1,276,600) | |
| Fixed charges | 1,781,700) | 1,698,500) | 1,682,600) | 1,774,000) | 1,645,300) | 1,652,100) | |
| Solvency Ratio | |||||||
| Fixed charge coverage1 | 1.92 | 2.02 | 1.65 | 0.26 | 2.04 | 1.80 | |
| Benchmarks | |||||||
| Fixed Charge Coverage, Competitors2 | |||||||
| Costco Wholesale Corp. | 18.23 | 15.30 | 14.03 | 12.40 | — | — | |
| Target Corp. | 12.02 | 5.24 | 6.48 | — | — | — | |
| Walmart Inc. | 5.38 | 5.16 | 4.82 | — | — | — | |
| Fixed Charge Coverage, Sector | |||||||
| Consumer Staples Distribution & Retail | 7.41 | 5.88 | 5.60 | — | — | — | |
| Fixed Charge Coverage, Industry | |||||||
| Consumer Staples | 9.06 | 7.46 | 7.19 | — | — | — | |
Based on: 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03), 10-K (reporting date: 2017-01-28).
1 2022 Calculation
Fixed charge coverage = Earnings before fixed charges and tax ÷ Fixed charges
= 3,413,900 ÷ 1,781,700 = 1.92
2 Click competitor name to see calculations.
- Earnings before fixed charges and tax
- The earnings before fixed charges and tax exhibited significant variability over the observed periods. Starting at approximately 2,981,500 thousand US dollars in early 2017, the figure increased to a peak of 3,349,300 thousand US dollars by early 2018. However, there was a notable decline in early 2019, dropping sharply to 465,000 thousand US dollars. Subsequently, earnings rebounded strongly in early 2020 to 2,781,300 thousand US dollars and continued to increase, reaching 3,438,300 thousand US dollars in early 2021 before slightly decreasing to 3,413,900 thousand US dollars in early 2022. This pattern indicates periods of both substantial growth and pronounced contraction within the timeframe.
- Fixed charges
- Fixed charges demonstrated relatively stable values throughout the periods, ranging from approximately 1,642,900 thousand US dollars to 1,781,700 thousand US dollars. Starting at 1,652,100 thousand US dollars in early 2017, fixed charges remained within a narrow band, showing minor fluctuations without significant upward or downward trends. This stability suggests consistent fixed obligations across the years under review.
- Fixed charge coverage ratio
- The fixed charge coverage ratio showed considerable fluctuation, indicative of changing ability to cover fixed charges with earnings before fixed charges and tax. Beginning at 1.8 in early 2017, the ratio increased to 2.04 in early 2018, reflecting an improved coverage position. However, a sharp decrease to 0.26 was observed in early 2019, signaling a potential inability to meet fixed charges from operating earnings during that period. Recovery followed with a rise to 1.65 in early 2020, then further improvement to 2.02 in early 2021. The ratio slightly declined to 1.92 by early 2022 but remained above the threshold of 1, generally implying adequate coverage.