Ross Stores Inc. (NASDAQ:ROST)

Debt to Equity

The debt to equity ratio remained relatively stable and low from April 2016 through February 2020, fluctuating minimally around 0.09 to 0.16. Beginning in May 2020, there was a noticeable spike to above 1.0, peaking at 1.1, followed by a gradual decline through October 2022, settling near 0.59. This indicates a significant increase in leverage during early 2020, likely due to external financial pressures, before a steady deleveraging trend.

Debt to Equity (Including Operating Lease Liability)

This measure closely followed the traditional debt to equity ratio until early 2019, after which it sharply increased from 0.09 around February 2019 to over 2.2 at May 2020, reflecting the impact of lease obligations on total debt. Post-peak, the ratio gradually declined albeit staying elevated above 1.3 by October 2022. This suggests that operating lease liabilities substantially augmented the company’s total financial leverage during the pandemic period and thereafter.

Debt to Capital

Debt to capital stayed relatively low and stable between 0.09 and 0.13 until early 2020, consistent with a conservative capital structure. A major increase occurred in May 2020, reaching 0.52, followed by a downward trend to 0.37 by October 2022. This increase aligns with the earlier noted spikes in debt ratios, indicating a temporary rise in debt financing relative to total capital during the 2020 period.

Debt to Capital (Including Operating Lease Liability)

Similar to the standard debt to capital ratio, this ratio experienced a marked rise beginning in early 2019 through 2020, peaking around 0.69 in May 2020. Subsequent values show a moderate decline, stabilizing near 0.58 by the end of the period. The inclusion of lease liabilities here again underscores their substantial effect on perceived financial leverage during the pandemic.

Debt to Assets

This ratio was very low and stable from 2016 to early 2020, fluctuating between 0.03 and 0.08, reflecting minimal reliance on debt relative to total assets. The ratio jumped to approximately 0.29 in May 2020, then gradually decreased to approximately 0.19 by October 2022. This trend supports the observation of heightened leverage commencing in 2020, with a partial retrenchment thereafter.

Debt to Assets (Including Operating Lease Liability)

Starting from a low base around 0.05 early in the period, this ratio sharply increased to nearly 0.60 by May 2020 due to the inclusion of operating lease liabilities. It then showed a moderate decline and stabilization at around 0.43 to 0.44 by late 2022. This confirms the considerable impact of lease liabilities on the company’s asset financing structure during and following the pandemic onset.

Financial Leverage

Financial leverage ratios hovered near 2.0 from April 2016 to early 2020, indicating moderate reliance on debt relative to equity. Starting from May 2020, there was a significant escalation to above 3.8, peaking near 4.16, followed by a gradual reduction to about 3.16 by October 2022. The increased leverage level post-2020 suggests a strategic or necessitated increase in debt usage, accompanied by a partial normalization in the later periods.

Total Debt

The total debt remained relatively stable from April 2016 through February 2019, fluctuating around the 396 million USD mark with minimal incremental increases quarter over quarter. Beginning in February 2019, a noticeable shift occurred with the total debt sharply increasing to over 3 billion USD by May 2020. Following this peak, the debt levels steadily decreased, reaching approximately 2.45 billion USD by October 2022. This pattern suggests a significant borrowing event followed by progressive debt repayment or reduction initiatives in the latter periods.

Stockholders’ Equity

Stockholders’ equity demonstrated a consistent upward trend from April 2016 through February 2020, increasing from approximately 2.54 billion USD to over 3.35 billion USD. However, there was a downward adjustment in May 2020, coinciding with the peak in total debt, where equity fell to around 2.82 billion USD. Post this dip, equity rebounded strongly, with an accelerating growth trend observed between January 2021 and October 2022, climbing from about 3.29 billion USD to over 4.14 billion USD. This indicates recovery and strengthening of the company's net asset position after a period of financial strain or restructuring.

Debt to Equity Ratio

The debt to equity ratio was low and steadily declining from 0.16 in April 2016 to around 0.09 by February 2020, reflecting an improving balance between debt and equity and a relatively conservative capital structure. However, a sudden and sharp increase occurred beginning May 2020, with the ratio spiking above 1.1, indicating that debt exceeded equity at that point. Subsequent quarters saw a significant deleverage as the ratio decreased steadily, returning to about 0.59 by October 2022. This pattern confirms a temporary increase in leverage followed by efforts to restore a more balanced and sustainable capital structure.

The analysis of the financial data over the periods from April 2016 through October 2022 reveals several key trends and changes in the company's capital structure and financial leverage.

Total Debt (including operating lease liability)

The total debt remained relatively stable at approximately 396 million USD from April 2016 to November 2018. From February 2019 onward, there was a significant increase in total debt values, reaching over 3.3 billion USD by May 2019 and peaking near 6.3 billion USD in May 2020. Following this peak, the debt figures showed a declining trend, reducing to slightly above 5.6 billion USD by October 2022.

Stockholders’ Equity

Stockholders’ equity exhibited a generally upward trajectory from around 2.5 billion USD in April 2016 to roughly 3.3 billion USD by February 2019. A notable decline occurred by May 2020 to approximately 2.8 billion USD, likely correlating with increased debt levels during this period. Afterwards, equity steadily increased, surpassing 4.1 billion USD by October 2022, marking a recovery and growth phase.

Debt to Equity Ratio

The debt to equity ratio remained low and stable, decreasing slightly from 0.16 in April 2016 to 0.09 by February 2019, indicating conservative leverage and possibly effective equity growth. Beginning in May 2019, there was a sharp increase in this ratio to levels above 1.0, peaking at 2.23 in May 2020. This reflects a substantial rise in debt relative to equity during this timeframe. Subsequently, the ratio steadily declined, settling near 1.36 by October 2022, suggesting a gradual deleveraging process but still indicating heightened leverage compared to the earlier periods.

Overall, the data indicate a period of relative financial stability and low leverage until early 2019, followed by a significant increase in debt and leverage, coinciding with a drop in equity. After reaching a leverage peak in mid-2020, the company has been reducing debt and rebuilding equity, though leverage remains elevated relative to the pre-2019 period.

The analysis of the quarterly financial data reveals distinct trends in the company's capital structure, particularly concerning total debt, total capital, and the debt to capital ratio over the observed periods.

Total Debt

The total debt level remained relatively stable from April 2016 through February 2019, fluctuating marginally around approximately $396 million (in thousands). This stability changes dramatically starting from May 2020, where total debt surges sharply to over $3 billion (in thousands), maintaining elevated levels around that magnitude through the subsequent quarters. A decline trend in total debt is observable from May 2021 onwards, gradually reducing but still remaining significantly higher than pre-2020 levels.

Total Capital

Total capital exhibited a gradual upward trajectory from approximately $2.9 billion in April 2016 to around $3.7 billion by February 2020. Following a substantial jump coinciding with the rise in debt around May 2020, total capital amounted to nearly $5.9 billion, subsequently continuing an increasing trend to approximately $6.6 billion by the latest date of October 2022. This indicates an expansion in the overall capital base alongside the increased leverage during the pandemic period.

Debt to Capital Ratio

The debt to capital ratio remained low and stable, averaging around 0.12 or less from 2016 until early 2020, indicating a conservative leverage position. However, there is a pronounced and immediate increase beginning in May 2020, where the ratio jumps to approximately 0.52, reflecting a significant increase in debt relative to total capital. After this peak, a gradual declining trend emerges through 2021 and 2022, with the ratio lowering to about 0.37 by the end of the period but not returning to the lower pre-2020 levels.

Overall Insights

The data suggests that the company maintained a conservative capital structure with low leverage ratios from 2016 through early 2020. The substantial increase in total debt and corresponding leverage beginning in May 2020 likely reflects strategic financing decisions in response to external factors, plausibly related to economic conditions prevalent in that period. Despite a gradual reduction in leverage following this peak, the company continues to operate with a significantly higher debt level than in prior years. The growth in total capital alongside the increased debt indicates that the company's overall financing capacity expanded during this time frame.

Total Debt (Including Operating Lease Liability)

The total debt remained relatively stable from April 2016 through November 2018, with values consistently around the 396,000 thousand US$ mark. A significant increase is observed starting February 2019, where the debt jumps dramatically to over 3 million US$ and continues to grow, peaking above 6.2 million US$ in mid-2020. Subsequently, the total debt begins a gradual decline but remains significantly higher than the pre-2019 levels, fluctuating around the 5.6 to 5.7 million US$ range through late 2022.

Total Capital (Including Operating Lease Liability)

Total capital shows a consistent upward trend from approximately 2.9 million US$ in early 2016 to around 3.6 million US$ by late 2018. Beginning in early 2019, a marked increase occurs parallel to that seen in total debt, with capital rising sharply to over 6.6 million US$, and then continuing to climb steadily, reaching around 9.85 million US$ by October 2022. This indicates substantial growth in the company’s capital base, especially from 2019 onwards.

Debt to Capital Ratio (Including Operating Lease Liability)

The debt to capital ratio was stable and relatively low, remaining between 0.11 and 0.13 from 2016 through November 2018, indicative of low leverage. A sharp increase occurs from early 2019, with the ratio jumping to approximately 0.5 and peaking near 0.69 in mid-2020. Following this peak, the ratio gradually declines but still remains considerably elevated at around 0.58 by the end of the period observed in late 2022. This suggests increased leverage starting in 2019, with some deleveraging thereafter but continuing at higher than historical levels.

Total Debt

Total debt remained relatively stable and low from April 2016 through February 2019, consistently around 396 million US dollars, indicating limited reliance on external borrowings during this period.

Starting in May 2020, there was a significant surge in total debt, increasing sharply to over 3 billion US dollars, peaking around this time before declining gradually but remaining elevated above 2.4 billion US dollars through late 2022.

This marked increase suggests a strategic shift or financial response possibly linked to external factors demanding higher leverage.

Total Assets

Total assets showed steady growth from April 2016 through February 2020, increasing from approximately 5.1 billion to 9.4 billion US dollars.

From May 2020 onwards, total assets experienced accelerated growth, reaching a peak above 13.9 billion US dollars in late 2021 before a slight decline towards 13.1 billion US dollars by October 2022.

The escalation in total assets corresponds roughly with the timing of increased debt, suggesting asset expansion potentially funded by higher borrowing levels.

Debt to Assets Ratio

The debt-to-assets ratio was consistently low, between 0.06 and 0.08, from 2016 to early 2019, reflecting a conservative capital structure and limited financial leverage.

During 2019 and early 2020, this ratio remained steady at about 0.03, indicating even lower leverage in relation to total assets.

However, a notable change is seen starting in May 2020, when the ratio sharply increased to approximately 0.29, while subsequently gradually decreasing but maintaining a higher level between 0.18 and 0.20 through late 2022.

The increase in this ratio aligns with the rise in total debt and total assets, suggesting a significant shift towards increased financial leverage during this recent period.

The analysis of the quarterly financial data reveals several notable trends pertaining to the company's debt levels, asset base, and leverage ratios over the examined periods.

Total Debt (including operating lease liability)

From April 2016 through November 2018, the total debt remained relatively stable, fluctuating marginally around 396,000 to 397,000 thousand US dollars. A significant jump is observed starting in February 2019, where total debt abruptly increases to over 3.3 million thousand US dollars. This elevated level of debt persists, with further increases noted, peaking above 6.2 million thousand US dollars by mid-2020. Subsequently, total debt shows a downward correction but remains elevated above 5.6 million thousand US dollars through late 2022.

Total Assets

Total assets exhibit a general upward trajectory from approximately 5.1 million thousand US dollars in early 2016 to over 6.2 million thousand US dollars by late 2018. A marked increase begins in early 2019, with assets rising sharply to surpass 9 million thousand US dollars and continuing to grow, reaching a peak of around 13.9 million thousand US dollars in early 2021. A mild decline follows but assets remain considerably higher than pre-2019 levels, stabilizing near 13 million thousand US dollars by the end of the observed period.

Debt to Assets Ratio (including operating lease liability)

The debt-to-assets ratio stays consistently low and stable, ranging from 0.06 to 0.08, through late 2018. However, from early 2019 onward, it undergoes a substantial increase, jumping to approximately 0.37 and maintaining this level for several quarters. An upward trend continues into 2020, peaking near 0.59. Following this peak, the ratio declines modestly, settling around 0.41 to 0.44 between mid-2021 and late 2022, indicating a relatively higher leverage position compared to earlier years.

In summary, the data indicates that the company underwent a significant transformation beginning in early 2019, characterized by a substantial rise in both total debt and assets. This change is also reflected in the leverage ratio, which escalates sharply, signaling a strategic shift toward increased debt financing relative to asset growth. Despite some reduction in debt levels and leverage ratios after mid-2020, the company retains a considerably higher debt burden and asset base compared to the periods preceding 2019.

The analysis of the financial data reveals certain key trends in the company’s asset base, equity position, and leverage over the specified periods.

Total assets

The total assets exhibited a generally upward trend over the timeframe. Starting from approximately $5.11 billion, the assets increased steadily with some fluctuations, reaching above $13 billion by late 2020. Thereafter, the level of assets stabilized around the $13 billion range, showing minor fluctuations but no significant declines. This suggests a period of growth followed by relative stabilization.

Stockholders’ equity

Stockholders’ equity also increased over time but demonstrated some volatility. Initially, equity rose consistently from about $2.54 billion to peaks around $3.35 billion by early 2020. However, there was a notable decline around the early 2020 period, coinciding with the onset of the COVID-19 pandemic, reducing equity to approximately $2.82 billion. Subsequently, equity rebounded strongly and continued to increase steadily, surpassing $4.14 billion by late 2022. The overall pattern suggests resilience and recovery after a pandemic-related dip.

Financial leverage (ratio)

The financial leverage ratio experienced noticeable changes. Early in the series, the ratio fluctuated around 2.0, reflecting a balanced relationship between assets and equity. Starting from early 2019, there was a sharp increase in leverage, peaking near 4.16 by mid-2020, indicating an increased reliance on liabilities relative to equity. Following this peak, leverage gradually decreased but remained elevated compared to the initial periods, finishing close to 3.16 by the end of the dataset. This trend suggests increased financial risk during the crisis period, followed by a moderate deleveraging phase.

In summary, the company demonstrated asset growth and equity expansion over the long term, albeit with disruptions due to external economic challenges. The leverage trends indicate strategic shifts in capital structure, with increased borrowing during periods of stress and partial normalization afterward.