Analysis of Solvency Ratios
Quarterly Data
Solvency ratios also known as long-term debt ratios measure a company ability to meet long-term obligations.
Solvency Ratios (Summary)
O’Reilly Automotive Inc., solvency ratios (quarterly data)
Based on: 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31).
The analysis of the quarterly financial ratios reveals several key trends in the company's leverage and coverage measures over the observed periods.
- Debt to Equity Ratio
- This ratio exhibits considerable volatility, beginning at 1.39 in March 2017, rising sharply to a peak of 26.15 in June 2019 and even reaching a high of 41.08 in March 2020. Thereafter, it experiences a decrease but remains elevated with fluctuations, for instance, around 29.4 in December 2020 and 17.57 in June 2021. Some periods exhibit missing data, but the pattern indicates periods of intensified reliance on debt relative to equity, followed by partial deleveraging.
- Debt to Equity Ratio Including Operating Lease Liability
- This ratio generally mirrors the behavior of the standard debt to equity ratio but at higher levels, reflecting the addition of operating lease liabilities to the debt measure. It peaks at 59.26 in March 2020 versus 41.08 for the standard metric, highlighting the significant impact of lease obligations on financial leverage metrics. The ratio shows a pattern of rising leverage through 2019 and early 2020, with a subsequent moderation.
- Debt to Capital Ratio
- Starting at 0.58 in March 2017, this ratio steadily increases over time, reaching and surpassing 1.0 from the end of 2020 through most of 2022. This suggests that debt is becoming the dominant component of capital structure, occasionally exceeding the total capital base, which may indicate complex accounting treatments or significant liabilities. The upward trend suggests growing financial risk associated with increased debt financing.
- Debt to Capital Ratio Including Operating Lease Liability
- Inclusion of operating lease liabilities marginally increases the debt to capital ratio across the periods, with a similar upward trend culminating in ratios above 1.0 in 2021 and 2022. This confirms the increasing burden of lease obligations contributing to overall leverage and the importance of including leases in debt assessments.
- Debt to Assets Ratio
- This ratio fluctuates moderately between about 0.27 and 0.43 from 2017 through 2018, with a notable decrease to roughly 0.32 - 0.33 range in 2021 and 2022. The trend suggests that debt represents a relatively stable proportion of total assets, with a slight decline in recent periods indicating some improvement in asset coverage of debt.
- Debt to Assets Ratio Including Operating Lease Liability
- When including operating lease liabilities, this ratio presents significantly higher values, increasing from approximately 0.27 in early 2017 to around 0.50 - 0.58 in the periods spanning 2019 to 2022. This elevated level indicates a substantial impact of lease obligations on total liabilities relative to assets, underscoring the importance of considering lease commitments in assessing financial risk.
- Financial Leverage
- Financial leverage, as measured here, demonstrates dramatic peaks and troughs, starting at 5.06 in March 2017 and spiking to over 100.00 in March 2020, reflecting periods of extreme leverage. After this peak, leverage falls but remains highly volatile, with values such as approximately 82.68 in December 2020 and 54.89 in June 2021. This volatility indicates significant swings in the firm's use of debt financing or changes in equity base during these intervals.
- Interest Coverage Ratio
- Interest coverage maintains a relatively stable downward trend from about 18.93 in September 2017 to a low near 13.1 in March 2020, followed by a gradual recovery, rising steadily to over 20.0 by mid-2022. This suggests that, while the company's ability to cover interest expenses declined heading into 2020, it improved thereafter, reflecting either higher earnings, lower interest expenses, or both.
In summary, the company displayed increasing leverage throughout much of the observed period, particularly when operating leases are accounted for within obligations. The periods around 2019 and early 2020 saw the highest leverage levels, followed by some deleveraging. Despite the high leverage, the ability to cover interest expenses declined but subsequently recovered, which may indicate improved operating performance or refinancing efforts. The consistent inclusion of operating lease liabilities substantially alters the perception of financial risk, emphasizing the importance of these liabilities in the capital structure assessment.
Debt Ratios
Coverage Ratios
Debt to Equity
O’Reilly Automotive Inc., debt to equity calculation (quarterly data)
| Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||||||||||||||||||||||||||
| Current portion of long-term debt | —) | —) | —) | —) | —) | —) | 299,880) | —) | 499,783) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | |||||||
| Long-term debt, less current portion | 4,370,772) | 4,669,833) | 3,827,891) | 3,826,978) | 3,826,073) | 3,825,177) | 3,824,288) | 4,123,217) | 4,122,424) | 4,127,397) | 4,471,248) | 3,890,527) | 3,703,628) | 3,783,738) | 3,460,921) | 3,417,122) | 3,174,327) | 3,253,538) | 3,193,066) | 2,978,390) | 2,900,816) | 2,604,062) | 1,977,539) | |||||||
| Total debt | 4,370,772) | 4,669,833) | 3,827,891) | 3,826,978) | 3,826,073) | 3,825,177) | 4,124,168) | 4,123,217) | 4,622,207) | 4,127,397) | 4,471,248) | 3,890,527) | 3,703,628) | 3,783,738) | 3,460,921) | 3,417,122) | 3,174,327) | 3,253,538) | 3,193,066) | 2,978,390) | 2,900,816) | 2,604,062) | 1,977,539) | |||||||
| Shareholders’ equity (deficit) | (1,205,463) | (1,107,430) | (328,273) | (66,423) | (140,853) | 217,694) | (6,977) | 140,258) | 709,225) | 589,100) | 108,844) | 397,340) | 166,219) | 144,682) | 372,365) | 353,667) | 498,379) | 384,990) | 423,828) | 653,046) | 614,179) | 869,312) | 1,422,596) | |||||||
| Solvency Ratio | ||||||||||||||||||||||||||||||
| Debt to equity1 | — | — | — | — | — | 17.57 | — | 29.40 | 6.52 | 7.01 | 41.08 | 9.79 | 22.28 | 26.15 | 9.29 | 9.66 | 6.37 | 8.45 | 7.53 | 4.56 | 4.72 | 3.00 | 1.39 | |||||||
| Benchmarks | ||||||||||||||||||||||||||||||
| Debt to Equity, Competitors2 | ||||||||||||||||||||||||||||||
| Amazon.com Inc. | 0.58 | 0.62 | 0.53 | 0.54 | 0.63 | 0.67 | 0.58 | 0.66 | 0.73 | 0.83 | 0.78 | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Home Depot Inc. | 37.82 | 17.48 | 20.52 | 11.29 | 23.01 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Lowe’s Cos. Inc. | — | — | 52.23 | 15.16 | 5.35 | 5.01 | 12.71 | 9.79 | 7.26 | 6.65 | 5.42 | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| TJX Cos. Inc. | 0.52 | 0.52 | 0.87 | 1.04 | 1.11 | 1.33 | 1.52 | 0.38 | 0.40 | 0.42 | 0.44 | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
Based on: 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31).
1 Q3 2022 Calculation
Debt to equity = Total debt ÷ Shareholders’ equity (deficit)
= 4,370,772 ÷ -1,205,463 = —
2 Click competitor name to see calculations.
An analysis of the quarterly financial data reveals notable trends in the company’s capital structure over the observed periods.
- Total Debt (US$ in thousands)
-
Total debt exhibits a general upward trajectory from March 2017 through September 2022. Starting at approximately 1.98 billion US dollars in the first quarter of 2017, the debt increased steadily with some fluctuations and spikes, reaching values above 4.6 billion by mid-2022. This indicates an increasing reliance on debt financing over time.
- Shareholders’ Equity (Deficit) (US$ in thousands)
-
Shareholders’ equity shows a contrasting pattern. Initial values in early 2017 begin at over 1.4 billion US dollars but decline substantially, becoming negative at several points from the first quarter of 2021 onward. The equity decreased sharply during several periods, particularly in 2021 and 2022, culminating in a negative equity position exceeding one billion US dollars deficit by mid-2022. This downward trend suggests deterioration in the company's net asset position or accumulation of losses over the course of the timeline.
- Debt to Equity Ratio
-
The debt to equity ratio reveals extreme volatility and overall significant increases in leverage. The ratio starts at approximately 1.39 in March 2017 and rises sharply, reaching levels as high as over 40 in some quarters—most notably in the first quarter of 2020—indicating very high debt in relation to equity. Multiple entries following 2020 show high or missing values, reflecting unstable capital structure metrics, likely due to the negative equity values and corresponding difficulties in calculating a meaningful ratio. Situations such as ratios above 20 imply extraordinary leveraging or financial distress conditions.
Overall, the data portrays a company that has progressively increased its debt burden while simultaneously experiencing a declining equity base, culminating in negative equity positions in recent periods. The escalating debt to equity ratios exemplify heightened financial risk and leverage. This combination signals potential concerns regarding solvency and the sustainability of the current financing strategy. The missing or omitted ratio values in latter periods may reflect complications in financial statement interpretations due to deteriorating equity balances.
Debt to Equity (including Operating Lease Liability)
O’Reilly Automotive Inc., debt to equity (including operating lease liability) calculation (quarterly data)
| Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||||||||||||||||||||||||||
| Current portion of long-term debt | —) | —) | —) | —) | —) | —) | 299,880) | —) | 499,783) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | |||||||
| Long-term debt, less current portion | 4,370,772) | 4,669,833) | 3,827,891) | 3,826,978) | 3,826,073) | 3,825,177) | 3,824,288) | 4,123,217) | 4,122,424) | 4,127,397) | 4,471,248) | 3,890,527) | 3,703,628) | 3,783,738) | 3,460,921) | 3,417,122) | 3,174,327) | 3,253,538) | 3,193,066) | 2,978,390) | 2,900,816) | 2,604,062) | 1,977,539) | |||||||
| Total debt | 4,370,772) | 4,669,833) | 3,827,891) | 3,826,978) | 3,826,073) | 3,825,177) | 4,124,168) | 4,123,217) | 4,622,207) | 4,127,397) | 4,471,248) | 3,890,527) | 3,703,628) | 3,783,738) | 3,460,921) | 3,417,122) | 3,174,327) | 3,253,538) | 3,193,066) | 2,978,390) | 2,900,816) | 2,604,062) | 1,977,539) | |||||||
| Current portion of operating lease liabilities | 360,529) | 341,705) | 334,884) | 337,832) | 336,962) | 333,624) | 329,334) | 322,778) | 318,533) | 318,601) | 316,932) | 316,061) | 308,726) | 304,034) | 296,605) | —) | —) | —) | —) | —) | —) | —) | —) | |||||||
| Operating lease liabilities, less current portion | 1,809,241) | 1,683,216) | 1,698,787) | 1,701,757) | 1,729,013) | 1,747,267) | 1,761,732) | 1,718,691) | 1,640,646) | 1,652,284) | 1,661,991) | 1,655,297) | 1,642,178) | 1,631,719) | 1,629,311) | —) | —) | —) | —) | —) | —) | —) | —) | |||||||
| Total debt (including operating lease liability) | 6,540,542) | 6,694,754) | 5,861,562) | 5,866,567) | 5,892,048) | 5,906,068) | 6,215,234) | 6,164,686) | 6,581,386) | 6,098,282) | 6,450,171) | 5,861,885) | 5,654,532) | 5,719,491) | 5,386,837) | 3,417,122) | 3,174,327) | 3,253,538) | 3,193,066) | 2,978,390) | 2,900,816) | 2,604,062) | 1,977,539) | |||||||
| Shareholders’ equity (deficit) | (1,205,463) | (1,107,430) | (328,273) | (66,423) | (140,853) | 217,694) | (6,977) | 140,258) | 709,225) | 589,100) | 108,844) | 397,340) | 166,219) | 144,682) | 372,365) | 353,667) | 498,379) | 384,990) | 423,828) | 653,046) | 614,179) | 869,312) | 1,422,596) | |||||||
| Solvency Ratio | ||||||||||||||||||||||||||||||
| Debt to equity (including operating lease liability)1 | — | — | — | — | — | 27.13 | — | 43.95 | 9.28 | 10.35 | 59.26 | 14.75 | 34.02 | 39.53 | 14.47 | 9.66 | 6.37 | 8.45 | 7.53 | 4.56 | 4.72 | 3.00 | 1.39 | |||||||
| Benchmarks | ||||||||||||||||||||||||||||||
| Debt to Equity (including Operating Lease Liability), Competitors2 | ||||||||||||||||||||||||||||||
| Amazon.com Inc. | 1.05 | 1.08 | 0.97 | 0.96 | 1.07 | 1.07 | 0.98 | 1.08 | 1.16 | 1.23 | 1.20 | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Home Depot Inc. | 43.73 | 20.47 | 23.99 | 13.16 | 26.74 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Lowe’s Cos. Inc. | — | — | 62.29 | 18.24 | 6.44 | 6.01 | 15.28 | 12.04 | 9.07 | 8.37 | 6.83 | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| TJX Cos. Inc. | 1.99 | 2.01 | 2.42 | 2.66 | 2.81 | 3.36 | 3.48 | 1.93 | 2.07 | 2.14 | 2.18 | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
Based on: 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31).
1 Q3 2022 Calculation
Debt to equity (including operating lease liability) = Total debt (including operating lease liability) ÷ Shareholders’ equity (deficit)
= 6,540,542 ÷ -1,205,463 = —
2 Click competitor name to see calculations.
The financial data reveals several notable trends in the company’s debt, equity, and leverage ratios over the observed periods.
- Total Debt (Including Operating Lease Liability)
- There is a clear upward trend in total debt from March 2017 through September 2018, increasing from approximately $1.98 billion to about $3.42 billion. A significant jump is observed in the quarter ending March 2019, where total debt almost doubles to around $5.39 billion and remains high, fluctuating between $5.86 billion and $6.69 billion thereafter. This pattern indicates aggressive leveraging or increased borrowing starting in early 2019, likely tied to strategic investments or expansions.
- Shareholders’ Equity
- Shareholders’ equity demonstrates a declining trajectory over the period. Initially, in March 2017, equity sits at approximately $1.42 billion but falls substantially to $353 million by December 2018. Following this, equity fluctuates, even turning negative multiple times from March 2021 onwards, with values reaching as low as negative $1.20 billion by September 2022. This pattern points to deteriorating net asset value and suggests possible losses, dividend payouts exceeding earnings, or other factors eroding equity.
- Debt to Equity Ratio
- The debt to equity ratio amplifies the above observations, showing considerable volatility and extremely high leverage in several quarters. Starting at 1.39 in March 2017, the ratio spikes dramatically, peaking at 59.26 in March 2020, indicating debt levels are vastly outpacing equity. The ratio's extreme highs correspond to periods when equity is near zero or negative, reflecting increased financial risk. The absence of data in some subsequent quarters limits full trend analysis but the available data suggests persistent high leverage conditions.
Overall, the company exhibits a pattern of increased debt utilization paired with weakening equity, leading to elevated financial leverage and risk. The significant rise in debt from early 2019 and concurrent deterioration in shareholders’ equity highlights potential challenges in financial stability and solvency that may warrant closer management attention.
Debt to Capital
O’Reilly Automotive Inc., debt to capital calculation (quarterly data)
| Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||||||||||||||||||||||||||
| Current portion of long-term debt | —) | —) | —) | —) | —) | —) | 299,880) | —) | 499,783) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | |||||||
| Long-term debt, less current portion | 4,370,772) | 4,669,833) | 3,827,891) | 3,826,978) | 3,826,073) | 3,825,177) | 3,824,288) | 4,123,217) | 4,122,424) | 4,127,397) | 4,471,248) | 3,890,527) | 3,703,628) | 3,783,738) | 3,460,921) | 3,417,122) | 3,174,327) | 3,253,538) | 3,193,066) | 2,978,390) | 2,900,816) | 2,604,062) | 1,977,539) | |||||||
| Total debt | 4,370,772) | 4,669,833) | 3,827,891) | 3,826,978) | 3,826,073) | 3,825,177) | 4,124,168) | 4,123,217) | 4,622,207) | 4,127,397) | 4,471,248) | 3,890,527) | 3,703,628) | 3,783,738) | 3,460,921) | 3,417,122) | 3,174,327) | 3,253,538) | 3,193,066) | 2,978,390) | 2,900,816) | 2,604,062) | 1,977,539) | |||||||
| Shareholders’ equity (deficit) | (1,205,463) | (1,107,430) | (328,273) | (66,423) | (140,853) | 217,694) | (6,977) | 140,258) | 709,225) | 589,100) | 108,844) | 397,340) | 166,219) | 144,682) | 372,365) | 353,667) | 498,379) | 384,990) | 423,828) | 653,046) | 614,179) | 869,312) | 1,422,596) | |||||||
| Total capital | 3,165,309) | 3,562,403) | 3,499,618) | 3,760,555) | 3,685,220) | 4,042,871) | 4,117,191) | 4,263,475) | 5,331,432) | 4,716,497) | 4,580,092) | 4,287,867) | 3,869,847) | 3,928,420) | 3,833,286) | 3,770,789) | 3,672,706) | 3,638,528) | 3,616,894) | 3,631,436) | 3,514,995) | 3,473,374) | 3,400,135) | |||||||
| Solvency Ratio | ||||||||||||||||||||||||||||||
| Debt to capital1 | 1.38 | 1.31 | 1.09 | 1.02 | 1.04 | 0.95 | 1.00 | 0.97 | 0.87 | 0.88 | 0.98 | 0.91 | 0.96 | 0.96 | 0.90 | 0.91 | 0.86 | 0.89 | 0.88 | 0.82 | 0.83 | 0.75 | 0.58 | |||||||
| Benchmarks | ||||||||||||||||||||||||||||||
| Debt to Capital, Competitors2 | ||||||||||||||||||||||||||||||
| Amazon.com Inc. | 0.37 | 0.38 | 0.35 | 0.35 | 0.39 | 0.40 | 0.37 | 0.40 | 0.42 | 0.45 | 0.44 | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Home Depot Inc. | 0.97 | 0.95 | 0.95 | 0.92 | 0.96 | 1.01 | 1.11 | 1.11 | 1.04 | 1.04 | 1.08 | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Lowe’s Cos. Inc. | 1.06 | 1.01 | 0.98 | 0.94 | 0.84 | 0.83 | 0.93 | 0.91 | 0.88 | 0.87 | 0.84 | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| TJX Cos. Inc. | 0.34 | 0.34 | 0.46 | 0.51 | 0.53 | 0.57 | 0.60 | 0.27 | 0.29 | 0.30 | 0.30 | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
Based on: 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31).
1 Q3 2022 Calculation
Debt to capital = Total debt ÷ Total capital
= 4,370,772 ÷ 3,165,309 = 1.38
2 Click competitor name to see calculations.
The analysis of the financial data reveals several notable patterns and trends concerning the company's debt levels and capital structure over the observed periods.
- Total Debt
-
Total debt shows an overall upward trajectory from March 31, 2017, through September 30, 2022. Starting at approximately $1.98 billion, the debt increases steadily with some minor fluctuations, reaching about $4.37 billion by the end of the last period. The increase is relatively smooth between 2017 and mid-2019, followed by a more pronounced rise in 2020.
Noteworthy is the spike in December 2020 when debt rose sharply compared to previous quarters, peaking around $4.62 billion before decreasing slightly in subsequent quarters. By the final quarter of the dataset, debt remains elevated above $4 billion, indicating a sustained higher leverage position.
- Total Capital
-
Total capital starts at $3.4 billion as of March 31, 2017, and generally trends upward through late 2020, peaking near $5.33 billion in September 2020. A reversal in trend occurs thereafter, with capital declining toward the later periods, ending at approximately $3.17 billion as of September 30, 2022.
This decline in total capital after 2020 suggests a reduction in overall financing capacity or a shift in the company’s capital base composition. The peak in total capital in late 2020 coincides with the previously noted spike in total debt, indicating increased financing activities during that period.
- Debt to Capital Ratio
-
The debt to capital ratio begins at 0.58 in the first quarter of 2017 and demonstrates a clear increasing pattern throughout the period. It steadily rises above 0.90 starting in 2018, oscillating near or above 1.0 from late 2020 onward.
This indicates that, from approximately 2020, the company's total debt has equaled or exceeded its total capital on numerous occasions, suggesting increased reliance on debt financing relative to equity or other capital components. The ratio culminates at 1.38 by the end of the analysis period, underlining a significant leverage expansion over the six years.
In summary, the financial data illustrate a marked increase in the company’s leverage, with total debt rising considerably and surpassing total capital in more recent periods. The initial growth in capital through 2020 was outpaced by the escalation in debt. Subsequently, a decline in total capital combined with persistently high debt levels has further elevated the debt to capital ratio. This reflects a substantial shift towards debt financing and increased financial risk exposure over the analyzed timeframe.
Debt to Capital (including Operating Lease Liability)
O’Reilly Automotive Inc., debt to capital (including operating lease liability) calculation (quarterly data)
| Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||||||||||||||||||||||||||
| Current portion of long-term debt | —) | —) | —) | —) | —) | —) | 299,880) | —) | 499,783) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | |||||||
| Long-term debt, less current portion | 4,370,772) | 4,669,833) | 3,827,891) | 3,826,978) | 3,826,073) | 3,825,177) | 3,824,288) | 4,123,217) | 4,122,424) | 4,127,397) | 4,471,248) | 3,890,527) | 3,703,628) | 3,783,738) | 3,460,921) | 3,417,122) | 3,174,327) | 3,253,538) | 3,193,066) | 2,978,390) | 2,900,816) | 2,604,062) | 1,977,539) | |||||||
| Total debt | 4,370,772) | 4,669,833) | 3,827,891) | 3,826,978) | 3,826,073) | 3,825,177) | 4,124,168) | 4,123,217) | 4,622,207) | 4,127,397) | 4,471,248) | 3,890,527) | 3,703,628) | 3,783,738) | 3,460,921) | 3,417,122) | 3,174,327) | 3,253,538) | 3,193,066) | 2,978,390) | 2,900,816) | 2,604,062) | 1,977,539) | |||||||
| Current portion of operating lease liabilities | 360,529) | 341,705) | 334,884) | 337,832) | 336,962) | 333,624) | 329,334) | 322,778) | 318,533) | 318,601) | 316,932) | 316,061) | 308,726) | 304,034) | 296,605) | —) | —) | —) | —) | —) | —) | —) | —) | |||||||
| Operating lease liabilities, less current portion | 1,809,241) | 1,683,216) | 1,698,787) | 1,701,757) | 1,729,013) | 1,747,267) | 1,761,732) | 1,718,691) | 1,640,646) | 1,652,284) | 1,661,991) | 1,655,297) | 1,642,178) | 1,631,719) | 1,629,311) | —) | —) | —) | —) | —) | —) | —) | —) | |||||||
| Total debt (including operating lease liability) | 6,540,542) | 6,694,754) | 5,861,562) | 5,866,567) | 5,892,048) | 5,906,068) | 6,215,234) | 6,164,686) | 6,581,386) | 6,098,282) | 6,450,171) | 5,861,885) | 5,654,532) | 5,719,491) | 5,386,837) | 3,417,122) | 3,174,327) | 3,253,538) | 3,193,066) | 2,978,390) | 2,900,816) | 2,604,062) | 1,977,539) | |||||||
| Shareholders’ equity (deficit) | (1,205,463) | (1,107,430) | (328,273) | (66,423) | (140,853) | 217,694) | (6,977) | 140,258) | 709,225) | 589,100) | 108,844) | 397,340) | 166,219) | 144,682) | 372,365) | 353,667) | 498,379) | 384,990) | 423,828) | 653,046) | 614,179) | 869,312) | 1,422,596) | |||||||
| Total capital (including operating lease liability) | 5,335,079) | 5,587,324) | 5,533,289) | 5,800,144) | 5,751,195) | 6,123,762) | 6,208,257) | 6,304,944) | 7,290,611) | 6,687,382) | 6,559,015) | 6,259,225) | 5,820,751) | 5,864,173) | 5,759,202) | 3,770,789) | 3,672,706) | 3,638,528) | 3,616,894) | 3,631,436) | 3,514,995) | 3,473,374) | 3,400,135) | |||||||
| Solvency Ratio | ||||||||||||||||||||||||||||||
| Debt to capital (including operating lease liability)1 | 1.23 | 1.20 | 1.06 | 1.01 | 1.02 | 0.96 | 1.00 | 0.98 | 0.90 | 0.91 | 0.98 | 0.94 | 0.97 | 0.98 | 0.94 | 0.91 | 0.86 | 0.89 | 0.88 | 0.82 | 0.83 | 0.75 | 0.58 | |||||||
| Benchmarks | ||||||||||||||||||||||||||||||
| Debt to Capital (including Operating Lease Liability), Competitors2 | ||||||||||||||||||||||||||||||
| Amazon.com Inc. | 0.51 | 0.52 | 0.49 | 0.49 | 0.52 | 0.52 | 0.49 | 0.52 | 0.54 | 0.55 | 0.54 | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Home Depot Inc. | 0.98 | 0.95 | 0.96 | 0.93 | 0.96 | 1.01 | 1.09 | 1.09 | 1.03 | 1.03 | 1.07 | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Lowe’s Cos. Inc. | 1.05 | 1.01 | 0.98 | 0.95 | 0.87 | 0.86 | 0.94 | 0.92 | 0.90 | 0.89 | 0.87 | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| TJX Cos. Inc. | 0.67 | 0.67 | 0.71 | 0.73 | 0.74 | 0.77 | 0.78 | 0.66 | 0.67 | 0.68 | 0.69 | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
Based on: 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31).
1 Q3 2022 Calculation
Debt to capital (including operating lease liability) = Total debt (including operating lease liability) ÷ Total capital (including operating lease liability)
= 6,540,542 ÷ 5,335,079 = 1.23
2 Click competitor name to see calculations.
The financial data reveals several notable trends regarding the company's leverage and capital structure over the analyzed period.
- Total Debt (including operating lease liability)
- The total debt exhibits an overall increasing trend from approximately $1.98 billion at the end of Q1 2017 to over $6.54 billion by Q3 2022. Within this period, debt levels rise sharply between late 2017 and early 2019, more than doubling. After peaking in early 2019, debt fluctuates somewhat but remains elevated above $5.8 billion through subsequent quarters. Notably, there is a significant jump in Q2 2022, reaching a peak at $6.69 billion before a slight decline towards Q3 2022.
- Total Capital (including operating lease liability)
- Total capital also trends upward from around $3.40 billion in Q1 2017 to approximately $5.34 billion in Q3 2022, though less steadily than debt. Capital jumps markedly between late 2017 and early 2019, aligning with the surge in debt, with a peak of approximately $7.29 billion in Q3 2020. Subsequently, capital decreases gradually and consistently from 2020 through 2022, ending lower than the peak but still well above the 2017 starting point.
- Debt to Capital Ratio (including operating lease liability)
- This ratio increases steadily from 0.58 in Q1 2017 to exceed 1.0 by various quarters starting in late 2021. Values above 1.0 indicate that total debt surpasses total capital, suggesting heightened leverage and potentially greater financial risk. The ratio rises sharply around 2018, stabilizes near one in 2019 and 2020, then climbs further in 2022, reaching highs of approximately 1.23 by Q3 2022. This suggests that the company has increasingly financed its operations through debt rather than equity or other capital sources over the period.
In summary, the data portrays a company that has considerably increased its debt load over nearly six years, leading to higher leverage ratios. Although total capital has grown, it has done so less consistently, resulting in a debt-to-capital ratio that has steadily worsened, surpassing parity in recent quarters. This pattern may indicate an aggressive leveraging strategy or increased reliance on debt financing, which could affect the company’s financial stability and risk profile.
Debt to Assets
O’Reilly Automotive Inc., debt to assets calculation (quarterly data)
| Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||||||||||||||||||||||||||
| Current portion of long-term debt | —) | —) | —) | —) | —) | —) | 299,880) | —) | 499,783) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | |||||||
| Long-term debt, less current portion | 4,370,772) | 4,669,833) | 3,827,891) | 3,826,978) | 3,826,073) | 3,825,177) | 3,824,288) | 4,123,217) | 4,122,424) | 4,127,397) | 4,471,248) | 3,890,527) | 3,703,628) | 3,783,738) | 3,460,921) | 3,417,122) | 3,174,327) | 3,253,538) | 3,193,066) | 2,978,390) | 2,900,816) | 2,604,062) | 1,977,539) | |||||||
| Total debt | 4,370,772) | 4,669,833) | 3,827,891) | 3,826,978) | 3,826,073) | 3,825,177) | 4,124,168) | 4,123,217) | 4,622,207) | 4,127,397) | 4,471,248) | 3,890,527) | 3,703,628) | 3,783,738) | 3,460,921) | 3,417,122) | 3,174,327) | 3,253,538) | 3,193,066) | 2,978,390) | 2,900,816) | 2,604,062) | 1,977,539) | |||||||
| Total assets | 12,238,028) | 12,067,689) | 11,760,389) | 11,718,707) | 11,789,385) | 11,949,333) | 11,850,887) | 11,596,642) | 12,503,951) | 11,728,535) | 11,108,862) | 10,717,160) | 10,372,724) | 10,201,943) | 10,061,562) | 7,980,789) | 7,894,714) | 7,766,740) | 7,666,657) | 7,571,885) | 7,479,328) | 7,345,698) | 7,203,724) | |||||||
| Solvency Ratio | ||||||||||||||||||||||||||||||
| Debt to assets1 | 0.36 | 0.39 | 0.33 | 0.33 | 0.32 | 0.32 | 0.35 | 0.36 | 0.37 | 0.35 | 0.40 | 0.36 | 0.36 | 0.37 | 0.34 | 0.43 | 0.40 | 0.42 | 0.42 | 0.39 | 0.39 | 0.35 | 0.27 | |||||||
| Benchmarks | ||||||||||||||||||||||||||||||
| Debt to Assets, Competitors2 | ||||||||||||||||||||||||||||||
| Amazon.com Inc. | 0.19 | 0.19 | 0.17 | 0.18 | 0.20 | 0.21 | 0.19 | 0.19 | 0.22 | 0.24 | 0.23 | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Home Depot Inc. | 0.54 | 0.51 | 0.49 | 0.53 | 0.53 | 0.55 | 0.61 | 0.61 | 0.56 | 0.55 | 0.55 | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Lowe’s Cos. Inc. | 0.53 | 0.49 | 0.45 | 0.47 | 0.43 | 0.42 | 0.48 | 0.49 | 0.45 | 0.43 | 0.41 | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| TJX Cos. Inc. | 0.11 | 0.12 | 0.18 | 0.20 | 0.20 | 0.23 | 0.28 | 0.09 | 0.09 | 0.10 | 0.10 | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
Based on: 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31).
1 Q3 2022 Calculation
Debt to assets = Total debt ÷ Total assets
= 4,370,772 ÷ 12,238,028 = 0.36
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals the following trends and insights.
- Total Debt
- Total debt has displayed a general upward trend from March 31, 2017, through September 30, 2022. Starting at approximately $1.98 billion in early 2017, the debt level increased significantly, reaching a peak of about $4.63 billion in September 2020. After this peak, the debt level fluctuated but remained relatively high, ending around $4.37 billion by the third quarter of 2022. Notable is the spike in debt during 2020, which may indicate increased borrowing during that period, potentially related to strategic initiatives or external economic factors.
- Total Assets
- Total assets also showed a sustained increase over the same period. Beginning at around $7.2 billion in early 2017, assets steadily climbed, reaching roughly $12.24 billion by September 2022. The growth in assets was relatively consistent with some acceleration evident around 2019 and 2020. Despite a slight dip in the last quarter of 2020, the upward trend resumed, reflecting ongoing asset accumulation or revaluation.
- Debt to Assets Ratio
- The debt to assets ratio exhibits cyclical fluctuations but generally remains within a moderate range. It started at 0.27 in the first quarter of 2017, rose to around 0.43 by December 2018, indicating increased leverage. Subsequently, the ratio stabilized somewhat between 0.32 and 0.39, with occasional increases and decreases. The ratio peaked close to 0.43 in late 2018 and then declined to near 0.32 in late 2021 before rising again by mid-2022. This pattern suggests periods of increased leverage followed by partial deleveraging or asset growth outpacing debt increases.
Overall, the company demonstrated growth in both total debt and assets over the observed periods. The leverage ratio reveals a strategy balancing debt and asset growth, with some volatility possibly linked to external economic conditions or internal financing decisions. The marked spike in debt in 2020, alongside steady asset growth, indicates notable capital structure adjustments during that time, requiring further investigation for underlying causes.
Debt to Assets (including Operating Lease Liability)
O’Reilly Automotive Inc., debt to assets (including operating lease liability) calculation (quarterly data)
| Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||||||||||||||||||||||||||
| Current portion of long-term debt | —) | —) | —) | —) | —) | —) | 299,880) | —) | 499,783) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | |||||||
| Long-term debt, less current portion | 4,370,772) | 4,669,833) | 3,827,891) | 3,826,978) | 3,826,073) | 3,825,177) | 3,824,288) | 4,123,217) | 4,122,424) | 4,127,397) | 4,471,248) | 3,890,527) | 3,703,628) | 3,783,738) | 3,460,921) | 3,417,122) | 3,174,327) | 3,253,538) | 3,193,066) | 2,978,390) | 2,900,816) | 2,604,062) | 1,977,539) | |||||||
| Total debt | 4,370,772) | 4,669,833) | 3,827,891) | 3,826,978) | 3,826,073) | 3,825,177) | 4,124,168) | 4,123,217) | 4,622,207) | 4,127,397) | 4,471,248) | 3,890,527) | 3,703,628) | 3,783,738) | 3,460,921) | 3,417,122) | 3,174,327) | 3,253,538) | 3,193,066) | 2,978,390) | 2,900,816) | 2,604,062) | 1,977,539) | |||||||
| Current portion of operating lease liabilities | 360,529) | 341,705) | 334,884) | 337,832) | 336,962) | 333,624) | 329,334) | 322,778) | 318,533) | 318,601) | 316,932) | 316,061) | 308,726) | 304,034) | 296,605) | —) | —) | —) | —) | —) | —) | —) | —) | |||||||
| Operating lease liabilities, less current portion | 1,809,241) | 1,683,216) | 1,698,787) | 1,701,757) | 1,729,013) | 1,747,267) | 1,761,732) | 1,718,691) | 1,640,646) | 1,652,284) | 1,661,991) | 1,655,297) | 1,642,178) | 1,631,719) | 1,629,311) | —) | —) | —) | —) | —) | —) | —) | —) | |||||||
| Total debt (including operating lease liability) | 6,540,542) | 6,694,754) | 5,861,562) | 5,866,567) | 5,892,048) | 5,906,068) | 6,215,234) | 6,164,686) | 6,581,386) | 6,098,282) | 6,450,171) | 5,861,885) | 5,654,532) | 5,719,491) | 5,386,837) | 3,417,122) | 3,174,327) | 3,253,538) | 3,193,066) | 2,978,390) | 2,900,816) | 2,604,062) | 1,977,539) | |||||||
| Total assets | 12,238,028) | 12,067,689) | 11,760,389) | 11,718,707) | 11,789,385) | 11,949,333) | 11,850,887) | 11,596,642) | 12,503,951) | 11,728,535) | 11,108,862) | 10,717,160) | 10,372,724) | 10,201,943) | 10,061,562) | 7,980,789) | 7,894,714) | 7,766,740) | 7,666,657) | 7,571,885) | 7,479,328) | 7,345,698) | 7,203,724) | |||||||
| Solvency Ratio | ||||||||||||||||||||||||||||||
| Debt to assets (including operating lease liability)1 | 0.53 | 0.55 | 0.50 | 0.50 | 0.50 | 0.49 | 0.52 | 0.53 | 0.53 | 0.52 | 0.58 | 0.55 | 0.55 | 0.56 | 0.54 | 0.43 | 0.40 | 0.42 | 0.42 | 0.39 | 0.39 | 0.35 | 0.27 | |||||||
| Benchmarks | ||||||||||||||||||||||||||||||
| Debt to Assets (including Operating Lease Liability), Competitors2 | ||||||||||||||||||||||||||||||
| Amazon.com Inc. | 0.34 | 0.34 | 0.32 | 0.31 | 0.34 | 0.34 | 0.31 | 0.31 | 0.34 | 0.35 | 0.35 | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Home Depot Inc. | 0.62 | 0.60 | 0.58 | 0.62 | 0.61 | 0.64 | 0.71 | 0.73 | 0.67 | 0.66 | 0.66 | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Lowe’s Cos. Inc. | 0.63 | 0.58 | 0.54 | 0.56 | 0.52 | 0.51 | 0.57 | 0.60 | 0.56 | 0.54 | 0.51 | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| TJX Cos. Inc. | 0.43 | 0.45 | 0.49 | 0.50 | 0.50 | 0.59 | 0.65 | 0.47 | 0.47 | 0.50 | 0.50 | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
Based on: 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31).
1 Q3 2022 Calculation
Debt to assets (including operating lease liability) = Total debt (including operating lease liability) ÷ Total assets
= 6,540,542 ÷ 12,238,028 = 0.53
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals several key trends regarding the company’s debt and asset base over the period examined.
- Total Debt (Including Operating Lease Liability)
- The total debt shows a general upward trend from March 2017 through September 2022, increasing from approximately 1.98 billion USD to around 6.54 billion USD. There were marked increases between December 2017 and March 2019, where debt rose sharply from about 3.42 billion USD to over 5.38 billion USD. Subsequent quarters saw fluctuations with intermittent decreases, especially noted in mid-2020 and late 2020, followed by an overall increase again into 2022, peaking near 6.69 billion USD before slightly declining towards the end of the period.
- Total Assets
- Total assets steadily increased throughout the period, beginning at approximately 7.2 billion USD in early 2017 and growing to about 12.24 billion USD by September 2022. This growth was relatively consistent, with no significant declines, indicating expansion of the company’s asset base. The pace of asset growth accelerated particularly from 2018 onward, coinciding with the periods of increased debt, suggesting financing of asset growth through higher borrowings.
- Debt to Assets Ratio
- The debt to assets ratio increased from 0.27 in March 2017 to a peak of 0.58 in March 2020, reflecting a growing leverage position over time. After reaching this peak, the ratio decreased somewhat during mid to late 2020, stabilizing around 0.5 to 0.55 in subsequent periods. This stabilization suggests some efforts at managing leverage or diversified growth in assets relative to debt. The ratio remained elevated compared to earlier years, indicating sustained higher leverage relative to asset size throughout the latter part of the analyzed timeframe.
Overall, the data indicates that the company has pursued a growth strategy supported by increased debt financing, resulting in a larger asset base. The leverage increased notably up to early 2020, followed by modest deleveraging and stabilization, implying cautious financial management in recent periods. This pattern may reflect responses to market conditions or strategic priorities emphasizing expansion balanced with capital structure considerations.
Financial Leverage
O’Reilly Automotive Inc., financial leverage calculation (quarterly data)
| Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||||||||||||||||||||||||||
| Total assets | 12,238,028) | 12,067,689) | 11,760,389) | 11,718,707) | 11,789,385) | 11,949,333) | 11,850,887) | 11,596,642) | 12,503,951) | 11,728,535) | 11,108,862) | 10,717,160) | 10,372,724) | 10,201,943) | 10,061,562) | 7,980,789) | 7,894,714) | 7,766,740) | 7,666,657) | 7,571,885) | 7,479,328) | 7,345,698) | 7,203,724) | |||||||
| Shareholders’ equity (deficit) | (1,205,463) | (1,107,430) | (328,273) | (66,423) | (140,853) | 217,694) | (6,977) | 140,258) | 709,225) | 589,100) | 108,844) | 397,340) | 166,219) | 144,682) | 372,365) | 353,667) | 498,379) | 384,990) | 423,828) | 653,046) | 614,179) | 869,312) | 1,422,596) | |||||||
| Solvency Ratio | ||||||||||||||||||||||||||||||
| Financial leverage1 | — | — | — | — | — | 54.89 | — | 82.68 | 17.63 | 19.91 | 102.06 | 26.97 | 62.40 | 70.51 | 27.02 | 22.57 | 15.84 | 20.17 | 18.09 | 11.59 | 12.18 | 8.45 | 5.06 | |||||||
| Benchmarks | ||||||||||||||||||||||||||||||
| Financial Leverage, Competitors2 | ||||||||||||||||||||||||||||||
| Amazon.com Inc. | 3.12 | 3.19 | 3.07 | 3.04 | 3.17 | 3.14 | 3.13 | 3.44 | 3.41 | 3.50 | 3.39 | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Home Depot Inc. | 70.56 | 34.20 | 41.51 | 21.39 | 43.60 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Lowe’s Cos. Inc. | — | — | 115.06 | 32.52 | 12.49 | 11.88 | 26.71 | 20.02 | 16.18 | 15.41 | 13.36 | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| TJX Cos. Inc. | 4.67 | 4.49 | 4.94 | 5.28 | 5.67 | 5.70 | 5.36 | 4.06 | 4.38 | 4.31 | 4.38 | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
Based on: 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31).
1 Q3 2022 Calculation
Financial leverage = Total assets ÷ Shareholders’ equity (deficit)
= 12,238,028 ÷ -1,205,463 = —
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals several notable trends across the key items of total assets, shareholders’ equity, and financial leverage over the reported periods.
- Total assets
- Total assets demonstrate a general upward trajectory from March 31, 2017, through September 30, 2022. Starting at approximately $7.2 billion, total assets increased steadily, reaching over $12.2 billion by the last reported quarter. This consistent growth, despite some fluctuations, indicates an expansion in the company’s asset base over the nearly six-year span.
- Shareholders’ equity (deficit)
- Shareholders’ equity presents a more irregular pattern, with significant variability over the periods. Initially positive, equity declined sharply from a peak of about $1.4 billion in early 2017 to negative territory in multiple quarters throughout 2021 and 2022. A few quarters show small positive values, but the overall trend suggests volatility and a weakening equity position. This recurring shift into deficit reflects challenges in maintaining net asset value relative to liabilities.
- Financial leverage
- Financial leverage ratios exhibit extreme fluctuations and a generally high level throughout the time frame. The leverage ratio increased markedly from approximately 5 times in early 2017, peaking at extraordinarily high levels in some quarters (e.g., above 100 times in early 2020 and above 80 times in late 2020). Some data points are missing, but available figures show leverage ratios fluctuating between moderate and excessively high values, indicating a reliance on debt financing relative to shareholders’ equity that is volatile and elevated during multiple quarters.
In summary, the company has expanded its total asset base significantly over time, while shareholders’ equity has deteriorated, turning negative in several recent quarters, which raises concerns about the financial stability and capital structure. The financial leverage ratios underscore a risk profile characterized by heavy indebtedness relative to equity, with substantial volatility over the analyzed period.
Interest Coverage
O’Reilly Automotive Inc., interest coverage calculation (quarterly data)
| Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||||||||||||||||||||||||||
| Net income | 585,438) | 576,760) | 481,880) | 518,973) | 558,652) | 585,451) | 501,609) | 392,945) | 527,252) | 531,667) | 300,438) | 324,916) | 391,293) | 353,681) | 321,152) | 300,357) | 366,151) | 353,073) | 304,906) | 302,315) | 283,734) | 282,821) | 264,934) | |||||||
| Add: Income tax expense | 176,411) | 180,538) | 151,381) | 125,251) | 161,877) | 175,883) | 154,218) | 106,984) | 159,154) | 168,743) | 79,222) | 84,397) | 110,600) | 111,290) | 93,000) | 92,800) | 89,500) | 96,800) | 90,500) | 74,409) | 155,796) | 153,505) | 120,290) | |||||||
| Add: Interest expense | 43,164) | 37,384) | 34,841) | 34,732) | 34,873) | 37,657) | 37,506) | 38,349) | 41,668) | 41,723) | 39,386) | 35,288) | 35,858) | 34,538) | 34,291) | 31,468) | 31,582) | 30,862) | 28,217) | 26,794) | 24,324) | 20,827) | 19,404) | |||||||
| Earnings before interest and tax (EBIT) | 805,013) | 794,682) | 668,102) | 678,956) | 755,402) | 798,991) | 693,333) | 538,278) | 728,074) | 742,133) | 419,046) | 444,601) | 537,751) | 499,509) | 448,443) | 424,625) | 487,233) | 480,735) | 423,623) | 403,518) | 463,854) | 457,153) | 404,628) | |||||||
| Solvency Ratio | ||||||||||||||||||||||||||||||
| Interest coverage1 | 19.63 | 20.43 | 20.42 | 20.22 | 18.78 | 17.78 | 16.97 | 15.07 | 14.77 | 14.08 | 13.10 | 13.79 | 14.03 | 14.10 | 14.36 | 14.87 | 15.28 | 16.08 | 17.45 | 18.93 | — | — | — | |||||||
| Benchmarks | ||||||||||||||||||||||||||||||
| Interest Coverage, Competitors2 | ||||||||||||||||||||||||||||||
| Amazon.com Inc. | 5.61 | 6.57 | 13.02 | 22.09 | 18.81 | 21.05 | 19.96 | 15.69 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Home Depot Inc. | 16.63 | 15.94 | 15.29 | 13.60 | 13.38 | 13.08 | 12.61 | 13.25 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
Based on: 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31).
1 Q3 2022 Calculation
Interest coverage
= (EBITQ3 2022
+ EBITQ2 2022
+ EBITQ1 2022
+ EBITQ4 2021)
÷ (Interest expenseQ3 2022
+ Interest expenseQ2 2022
+ Interest expenseQ1 2022
+ Interest expenseQ4 2021)
= (805,013 + 794,682 + 668,102 + 678,956)
÷ (43,164 + 37,384 + 34,841 + 34,732)
= 19.63
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals several notable trends in the operating performance and interest-related metrics over the observed periods.
- Earnings Before Interest and Tax (EBIT)
- The EBIT figures demonstrate a generally strong performance with a cyclical pattern recurring annually. Between March 2017 and September 2019, EBIT fluctuated within a band roughly between $400 million and $540 million (in thousands). There is a noticeable spike beginning in June 2020, where EBIT surged dramatically to $742 million, maintaining an elevated level throughout the subsequent quarters. This increase could suggest significant operational improvements, enhanced profitability, or extraordinary events impacting earnings during this timeframe. The highest quarterly EBIT values are observed from mid-2020 through late 2022, peaking around $805 million in September 2022. Despite some quarterly fluctuations, the overall trend post mid-2020 is an improved EBIT performance compared to prior years.
- Interest Expense
- Interest expense shows a gradual upward trend over the time series. Starting near $19 million in early 2017, it steadily increases to approximately $35 million by late 2019. Post-2019, interest expense continues to rise, reaching over $43 million by September 2022. This incremental rise indicates either increased borrowing, higher interest rates, or a combination of both factors, which result in growing financing costs for the company.
- Interest Coverage Ratio
- The interest coverage ratio, computed as EBIT divided by interest expense, is available from late 2017 onward and exhibits a consistent increase over the reported periods. Starting near 15 times coverage in late 2017, the ratio improves continuously, reaching values above 20 times around late 2021 to mid-2022, before slightly declining to approximately 19.6 times in the last available quarter. This upward trend indicates an enhancing ability to meet interest obligations from operating earnings, reflecting stronger operational income relative to interest expenses despite the observed increase in interest costs.
In summary, the financial data depicts robust growth in EBIT from mid-2020, driving improved interest coverage ratios despite rising interest expenses. The increasing EBIT contributes to strengthening the company's debt service capacity, signaling improved financial health and operational efficiency in the latter periods analyzed.