Ross Stores Inc. (NASDAQ:ROST)

The financial ratios exhibit several notable trends over the analyzed periods. Starting with asset turnover metrics, the reported total asset turnover ratio remained relatively stable around 2.42 to 2.47 from 2017 to 2019 but then experienced a significant decline to 0.99 by January 2021, followed by a partial recovery to 1.39 in January 2022. The adjusted total asset turnover mirrors this pattern, suggesting consistent operational efficiency adjustments over time, but also highlighting a substantial drop in 2021 that begins to improve in the subsequent year.

Regarding leverage, the reported debt to equity ratio was quite low and stable between 0.09 and 0.14 from 2017 through 2020 but rose sharply to 0.76 in 2021 before slightly decreasing to 0.60 in 2022. The adjusted debt to equity ratio presents higher values consistently, rising from approximately 1.06-1.12 in earlier years to a peak of 1.68 in 2021, then falling to 1.34 in 2022. This indicates an increased use of debt relative to equity during the 2021 period. The reported debt to capital ratio shows a similar trend with a substantial increase in 2021 and slight moderation afterward, whereas the adjusted debt to capital ratio remains more elevated throughout the time frame but follows the same directional trend.

Financial leverage ratios, both reported and adjusted, increased consistently over the years with a more pronounced jump in 2020 and peaking in 2021 before a mild reduction in 2022. The reported financial leverage ascended from approximately 1.84-1.93 in early years to a peak of 3.86 in 2021, indicating heightened reliance on debt and potentially greater financial risk during this period.

Profitability margins show an interesting fluctuation. The reported net profit margin steadily improved between 2017 and 2019, reaching over 10%, but then plunged dramatically to below 1% in 2021 before rebounding to above 9% in 2022. The adjusted net profit margin follows a very similar trajectory, confirming this sharp dip and recovery pattern. This suggests a significant disruption impacting profitability in 2021, followed by a restoration of profitability in the following year.

Return on equity (ROE) trends largely parallel net profit margin developments. Reported ROE rose from roughly 40% in 2017 to nearly 50% by 2020, then collapsed to about 2.6% in 2021, with a substantial rebound to over 42% in 2022. The adjusted ROE echoes this behavior, indicating a temporary but severe profitability challenge during 2021 that was largely reversed later. Return on assets (ROA) exhibits a somewhat consistent growth from 2017 to 2019, peaking over 26% in 2019 before declining sharply in 2020 and 2021, then recovering to around 12-13% in 2022. Adjusted ROA values are generally lower but follow the same pattern, underscoring impaired asset efficiency during 2020-2021.

Overall, the data reflects a period of stable or improving operational efficiency and profitability up to 2019, followed by a pronounced downturn in asset utilization, leverage, and profitability metrics in 2020 and 2021. The year 2021 particularly stands out as a period of financial strain with increased leverage and dramatically reduced profit margins and returns. By 2022, many ratios demonstrate partial recovery, implying some mitigation of the adverse conditions experienced previously. This pattern may correspond to external challenges impacting financial performance temporarily, with operations and profitability beginning to normalize thereafter.

The analysis of the financial metrics over the six-year period reveals several significant trends and changes.

Sales

Sales showed a consistent increase from 2017 through 2020, rising from approximately $12.87 billion to $16.04 billion. However, there was a notable decline in 2021 to $12.53 billion, followed by a substantial recovery and new peak in 2022 at roughly $18.92 billion. This pattern suggests a possible external disruption in 2021 with a strong rebound thereafter.

Total Assets

Total assets steadily increased each year from about $5.31 billion in 2017 to $13.64 billion in 2022. The largest increments occurred between 2019 and 2021, nearly doubling from about $6.07 billion to $12.72 billion. This growth indicates significant asset acquisition or capital investment during this period.

Reported Total Asset Turnover

The reported total asset turnover ratio was stable at around 2.42 to 2.47 between 2017 and 2019, indicating efficient use of assets to generate sales. However, it then declined sharply to 1.72 in 2020 and further plummeted to 0.99 in 2021, before partially recovering to 1.39 in 2022. This decline suggests diminishing efficiency in asset utilization paralleling the drop in sales in 2021, with gradual improvement in 2022.

Adjusted Total Assets

Adjusted total assets show a more moderated increase compared to reported total assets, starting at about $8.14 billion in 2017, growing to $9.39 billion in 2019, peaking at around $12.72 billion in 2021, and reaching $13.64 billion in 2022. The adjustment reduces the asset base in earlier years, which contextualizes turnover ratios differently.

Adjusted Total Asset Turnover

The adjusted turnover ratio follows a similar trend to the reported one but at lower levels: relatively stable near 1.58 to 1.63 during 2017-2018, a small dip to 1.60 in 2019, rising slightly to 1.72 in 2020, then sharply decreasing to 0.99 in 2021, and recovering to 1.39 in 2022. This pattern also reflects the fluctuating efficiency in asset usage over the period, supporting observations from reported turnover.

Overall, the data indicates that while the asset base expanded significantly, particularly from 2019 onward, efficiency in generating sales from assets declined sharply in 2021 coinciding with a sales drop. The recovery in 2022 shows improvements but turnover ratios remain below earlier peak levels. This suggests the company faced operational challenges impacting asset use in 2021 but demonstrated resilience and partial recovery in the following year.

The financial data reveals notable trends in the company's capital structure over the six-year period from early 2017 to early 2022. Examination of both reported and adjusted figures indicates shifts in debt and equity levels, impacting leverage ratios significantly.

Total Debt and Stockholders’ Equity

Total debt remained relatively stable around 390 million USD during the first four years, with a slight decline observed in 2019 and 2020, reaching approximately 312 million USD. However, a striking increase occurs in 2021, where total debt surges dramatically to over 2.5 billion USD, maintaining a similar level into 2022.

Stockholders’ equity showed steady growth from approximately 2.75 billion USD in 2017 to over 3.35 billion USD in 2020, followed by a slight dip in 2021. In 2022, equity rises markedly to exceed 4 billion USD, indicating strengthened capital base despite fluctuations observed in the preceding year.

Reported Debt to Equity Ratio

The reported debt to equity ratio reflects a low leverage position from 2017 through 2020, ranging from 0.14 to 0.09, indicative of conservative financing and a strong equity base. This ratio increases substantially in 2021 to 0.76 and slightly decreases to 0.60 in 2022, evidencing a shift towards greater reliance on debt financing relative to equity in recent years.

Adjusted Total Debt and Adjusted Stockholders’ Equity

Adjusted total debt figures, which presumably incorporate additional liabilities or off-balance sheet items, show a continuous upward trajectory from approximately 3.22 billion USD in 2017 to over 5.6 billion USD in 2022. This suggests an increasing overall debt burden beyond the reported debt figures.

Adjusted stockholders’ equity also trends upward, growing from roughly 2.87 billion USD in 2017 to over 4.19 billion USD in 2022. Although equity growth is apparent, the increment is not as steep as that of adjusted debt, indicating rising leverage.

Adjusted Debt to Equity Ratio

The adjusted debt to equity ratio starts slightly above 1.1 in 2017 and remains relatively stable around this level until 2020, suggesting a balanced capital structure when accounting for all adjustments. A significant increase to 1.68 occurs in 2021, followed by a decrease to 1.34 in 2022, reinforcing findings from reported ratios about increased leverage but also showing some improvement in the last year.

In summary, the company demonstrates a transition from low leverage to a materially higher debt position both in reported and adjusted terms beginning in 2021. Despite this increased debt load, stockholders’ equity has also grown, particularly in 2022, which partially mitigates leverage risk. The fluctuations in leverage ratios highlight shifting financial strategies or operational needs during this timeframe, with a notable emphasis on increased debt financing in the most recent periods examined.

The financial data reveals several clear trends in the company’s capital structure and indebtedness over the examined periods.

Total Debt and Total Capital

Total debt shows a relatively stable pattern between 2017 and 2020, fluctuating slightly but generally remaining below US$400 million. However, in 2021, there is a substantial increase, with total debt surging to over US$2.5 billion, maintaining a similar high level in 2022.

Total capital also follows an upward trajectory over time but exhibits more moderate growth from 2017 through 2020, increasing from approximately US$3.1 billion to US$3.7 billion. This is followed by a marked increase in 2021 and 2022, where total capital rises above US$5.8 billion and further to over US$6.5 billion respectively.

Reported Debt to Capital Ratio

The reported debt to capital ratio remains low and stable between 2017 and 2020, ranging from 0.13 to 0.09, indicating a conservative leverage position. There is a notable spike in this ratio starting in 2021, climbing sharply to 0.43 and slightly declining to 0.38 in 2022. This corresponds with the significant increase in total debt and capital, signifying a much higher proportion of debt relative to capital in the more recent periods.

Adjusted Total Debt and Adjusted Total Capital

Adjusted figures for total debt and total capital are consistently higher than reported figures, which typically reflect accounting adjustments or inclusion of additional liabilities/assets. The adjusted total debt increases steadily from about US$3.2 billion in 2017 to approximately US$3.5 billion in 2020, then sharply rises to nearly US$5.7 billion by 2021, with a slight decrease in 2022.

Adjusted total capital shows continuous growth, starting near US$6.1 billion in 2017, peaking near US$7.1 billion in 2019, experiencing a slight dip in 2020, then sharply increasing to over US$9.1 billion and US$9.8 billion in 2021 and 2022 respectively.

Adjusted Debt to Capital Ratio

The adjusted debt to capital ratio remains relatively stable and moderate from 2017 through 2020, between 0.50 and 0.53, indicating a balanced leverage level in adjusted terms. In 2021, this ratio climbs to 0.63, suggesting increased reliance on debt financing, though it slightly declines to 0.57 in 2022. Despite the 2021 increase, the ratio indicates more moderate leverage compared with the reported debt to capital ratio, hinting at the impact of adjusted capital measures in mitigating perceived leverage risk.

Overall, there is a clear shift towards greater indebtedness and capital expansion starting in 2021, reflected in both reported and adjusted measures. Prior to 2021, leverage ratios were low and stable, but recent years show increased leverage, potentially signaling strategic financing changes or capital expenditures requiring higher debt levels. The adjusted ratios temper the leverage increase somewhat, implying adjustments that enhance capital base and mitigate risk perception compared to reported figures alone.

The financial data exhibits a consistent upward trend in total assets over the six-year period, increasing from approximately $5.31 billion in early 2017 to nearly $13.64 billion by early 2022. This represents substantial growth, particularly noticeable between 2019 and 2021, where total assets rose sharply from about $6.07 billion to $12.72 billion, indicating significant asset expansion or acquisitions during that timeframe.

Stockholders’ equity also shows a general increase, growing from $2.75 billion in 2017 to about $4.06 billion in 2022. However, equity growth appears to be more moderate and somewhat fluctuates; for instance, after a steady rise until 2020, equity slightly declined by 2021 before rebounding in 2022. This suggests some variation in retained earnings or capital adjustments during the later years.

Reported financial leverage, computed as the ratio of total assets to stockholders’ equity, decreased slightly from 1.93 in 2017 to 1.84 in 2019, indicating a reduction in leverage and possibly a more equity-funded asset base during this period. However, there is a notable increase in leverage to 3.86 by 2021, followed by a decrease to 3.36 in 2022. This spike implies a significant increase in liabilities or borrowing relative to equity within those years, reflecting a potentially more aggressive capital structure.

Adjusted total assets, which may reflect refinements such as off-balance-sheet items or valuation adjustments, broadly track the pattern of reported total assets but are consistently higher, rising from about $8.14 billion in 2017 to $13.64 billion in 2022. The increase is steady, with the sharpest rise between 2020 and 2021, mirroring the reported total assets trend.

Similarly, adjusted stockholders’ equity follows the trend of reported equity but with slightly higher values each year. Starting near $2.87 billion in 2017, it increases to approximately $4.20 billion by 2022, showing consistent growth in the company’s adjusted equity base.

Adjusted financial leverage ratios remain above the reported leverage figures throughout the period, starting at 2.84 in 2017 and peaking at 3.73 in 2021 before declining to 3.25 in 2022. The trend generally reflects the same pattern as reported leverage but suggests the adjusted measures point to a somewhat higher leverage position, potentially identifying additional liabilities or lower adjusted equity levels than in the reported figures.

Overall, the data indicate substantial growth in the asset base accompanied by increasing leverage over the period, particularly around 2020 and 2021. The variations in equity levels and leverage ratios suggest changes in the financing strategy, with a likely increased reliance on debt or liabilities in the more recent years, although partial deleveraging is observed by 2022. The adjusted figures confirm these trends and highlight that the company’s financial structure, when considering adjustments, reflects a more leveraged position than the reported data alone.

The financial data demonstrates a general upward trend in both net earnings and sales over the observed periods, with notable fluctuations occurring in the most recent years.

Net Earnings

Net earnings increased steadily from 1,117,654 thousand US dollars in January 2017 to a peak of 1,660,928 thousand US dollars in February 2020. However, there was a sharp decline in January 2021 to 85,382 thousand US dollars, followed by a significant recovery to 1,722,589 thousand US dollars in January 2022.

Sales

Sales followed a consistent upward trajectory from 12,866,757 thousand US dollars in January 2017 to 16,039,073 thousand US dollars in February 2020. Similar to net earnings, sales dropped considerably in January 2021 to 12,531,565 thousand US dollars before rebounding strongly to 18,916,244 thousand US dollars in January 2022, surpassing all prior periods.

Reported Net Profit Margin

The reported net profit margin showed an overall improvement from 8.69% in January 2017, peaking at 10.59% in February 2019, and remaining relatively stable around 10.36% in February 2020. In January 2021, margin drastically fell to 0.68%, reflecting the sharp declines in net earnings and sales. The margin recovered to 9.11% by January 2022, though it remained slightly below earlier peak levels.

Adjusted Net Earnings

Adjusted net earnings mirrored the pattern of net earnings, increasing steadily from 1,108,860 thousand US dollars in January 2017 to a high of 1,692,937 thousand US dollars in February 2020. A substantial decrease occurred in January 2021, with adjusted net earnings dropping to 57,570 thousand US dollars, followed by a recovery to 1,738,364 thousand US dollars in January 2022.

Adjusted Net Profit Margin

The adjusted net profit margin increased from 8.62% in January 2017 to approximately 10.81% in February 2019 and remaining near that level (10.56%) in February 2020. It sharply declined to 0.46% in January 2021, in line with the other profitability metrics, before rebounding to 9.19% in January 2022.

The data reveals a significant disruption during the January 2021 period, likely indicative of external factors impacting financial performance. This event caused sharp contractions in both sales and earnings, resulting in markedly lower profit margins. However, the subsequent period shows a robust recovery exceeding prior sales highs and near restoration of profit margin levels, suggesting resilience and effective management response post-disruption.

The financial data reveals significant fluctuations and overall trends in key profitability and equity metrics over the analyzed periods. Net earnings demonstrated a consistent upward trajectory from January 2017 through February 2020, increasing from approximately $1.12 billion to around $1.66 billion. However, a sharp decline is observed in January 2021, where net earnings dropped substantially to about $85 million, before rebounding dramatically to over $1.72 billion in January 2022.

Stockholders’ equity followed a generally steady increasing trend throughout the periods, growing from approximately $2.75 billion in early 2017 to $4.06 billion by early 2022. A slight dip is noted in January 2021 compared to the previous year, but the equity base recovered strongly in the following year.

The reported Return on Equity (ROE) mirrored the net earnings pattern, starting at 40.67% in 2017 and steadily climbing to a peak of 49.44% by 2020, indicating increasing efficiency in generating profits from equity. However, January 2021 saw an abrupt drop to 2.59%, reflecting the earnings decline, before rebounding to 42.43% in 2022. This volatility suggests an extraordinary event or anomaly impacting profitability during 2021.

Adjusted net earnings, which likely exclude certain one-time items or accounting adjustments, showed a similar pattern: a steady increase from 2017 through 2020, a substantial decrease in 2021 to approximately $57.6 million, and a strong recovery to nearly $1.74 billion in 2022. Adjusted stockholders’ equity also increased steadily over time, with a minor contraction in 2021, followed by a notable rise in 2022.

The adjusted ROE, an indicator of the firm's core profitability absent unusual items, rose consistently from 38.64% in 2017 to 48.25% in 2020, dropped sharply to 1.69% in 2021, and then rebounded to 41.41% in 2022. This aligns closely with the trends in adjusted net earnings and reinforces the observation of an anomalous event in 2021 impacting profitability ratios across both reported and adjusted figures.

Overall, the data indicates a strong and improving financial performance from 2017 through 2020, interrupted by a significant downturn in 2021, followed by a robust recovery in 2022. The patterns in both reported and adjusted figures highlight consistency in long-term growth and profitability, with the anomalous 2021 period suggesting an isolated disruption rather than a sustained decline.

Net Earnings

Net earnings showed a general increasing trend from 2017 to 2022, rising from approximately 1.12 billion USD in 2017 to 1.72 billion USD in 2022. However, a significant decline occurred in 2021, with net earnings dropping sharply to around 85 million USD before rebounding strongly the following year.

Total Assets

Total assets exhibited consistent growth throughout the period, increasing from about 5.3 billion USD in 2017 to over 13.6 billion USD by 2022. This growth was somewhat more accelerated from 2020 onward, indicating expansion or investment activities during the latter part of the timeframe.

Reported Return on Assets (ROA)

The reported ROA followed a fluctuating pattern. It increased from 21.05% in 2017 to a peak of 26.14% in 2019 but then declined markedly to only 0.67% in 2021 before improving to 12.63% in 2022. The sharp drop in 2021 signifies reduced profitability relative to assets during that year.

Adjusted Net Earnings

Adjusted net earnings generally trended upwards from approximately 1.11 billion USD in 2017 to about 1.74 billion USD in 2022, closely mirroring the pattern seen in net earnings. Similar to net earnings, there was a pronounced dip in 2021 to around 58 million USD, followed by a recovery.

Adjusted Total Assets

Adjusted total assets increased steadily from around 8.14 billion USD in 2017 to approximately 13.64 billion USD in 2022. The values show a consistent upward movement without any periods of decline, reflecting an expanding asset base across all years.

Adjusted Return on Assets (ROA)

Adjusted ROA rose from 13.63% in 2017 to a high of 18.11% in 2020, then sharply decreased to 0.45% in 2021, and recovered to 12.74% in 2022. This trajectory resembles the reported ROA trend but generally indicates more conservative profitability margins when adjustments are considered.

Summary of Trends

The data reveals steady asset growth both in total and adjusted terms throughout the years. Profitability ratios, both reported and adjusted ROA, demonstrate strong performance until 2019-2020, followed by a notable decline in 2021 corresponding with a sharp drop in earnings. The recovery in 2022 suggests a rebound in operational effectiveness and earnings capacity relative to the asset base. The discrepancy between reported and adjusted figures highlights the impact of certain adjustments on profit and asset measurements, with adjusted values typically indicating lower returns.