AutoZone Inc. (NYSE:AZO)

The financial data indicates that the goodwill of the company remained constant at US$302.645 million throughout the entire period from 2018 to 2023, showing no impairment or additional goodwill acquisitions.

Technology intangible assets were held at US$870 thousand for the years 2018 and 2019 but appear to have been fully written off or disposed of starting 2020, as no amounts are reported thereafter.

Customer relationships intangible assets remained stable at US$29.376 million from 2018 through 2021 but were no longer reported in subsequent years, suggesting amortization or disposal.

The gross carrying amount of amortizing intangible assets showed a slight decrease from US$30.246 million in 2018 and 2019 to US$29.376 million during 2020 and 2021, followed by absence in later years, consistent with the disappearance of customer relationship assets.

Accumulated amortization increased steadily each year, moving from approximately US$20.457 million in 2018 to US$29.376 million by 2021, reflecting ongoing amortization expense charged against these intangible assets until their full amortization or derecognition.

As a result, the net carrying amount of amortizing intangible assets declined sharply from US$9.789 million in 2018 to US$1.443 million in 2020 and was reported as nil after 2020, indicating these intangible assets were either fully amortized or impaired out of the books.

Overall, the total goodwill and intangibles combined decreased marginally from US$312.434 million in 2018 to US$302.645 million by 2021 and then remained flat, driven primarily by reductions and eventual elimination of certain amortizing intangible assets, while goodwill itself remained unchanged.

The financial data indicates a clear upward trend in total assets over the six-year period examined. Reported total assets increased consistently from approximately 9.35 billion USD in 2018 to nearly 16.0 billion USD in 2023. The adjusted total assets, which likely account for the removal of goodwill or other intangible adjustments, follow a similar trajectory, rising from about 9.04 billion USD to 15.68 billion USD over the same timeframe. The alignment between reported and adjusted figures suggests that while adjustments reduce the asset base, the overall growth trend remains intact.

Conversely, stockholders’ deficit presents a more volatile and concerning pattern. The reported stockholders’ deficit fluctuates significantly, starting at a deficit of roughly 1.52 billion USD in 2018, worsening to nearly 1.71 billion USD in 2019, improving substantially to 878 million USD in 2020, then deteriorating sharply to 1.80 billion USD in 2021, and further deepening to 3.54 billion USD and 4.35 billion USD in 2022 and 2023, respectively. The adjusted stockholders’ deficit shows a comparable but consistently higher level of deficit across all years, indicating that adjustments increase the magnitude of the deficit. It progresses from about 1.82 billion USD deficit in 2018 to over 4.65 billion USD deficit in 2023, demonstrating an overall worsening equity position when adjustments are accounted for.

Overall, the company’s asset base has expanded steadily, which could reflect growth in operational scale or acquisitions. However, the increasing stockholders’ deficit, especially on an adjusted basis, signals a deteriorating net equity situation. This divergence between asset growth and worsening equity implies potential challenges in capital structure or accumulated losses that merit further investigation to understand underlying causes and financial implications.

Total Assets

Consistent growth from 9.35 billion USD to nearly 16.0 billion USD (reported), and from 9.04 billion USD to 15.68 billion USD (adjusted).

Stockholders’ Deficit

Fluctuating but overall increasing deficit, with reported figures worsening from 1.52 billion USD to 4.35 billion USD and adjusted figures from 1.82 billion USD to 4.65 billion USD, indicating a deepening negative equity position.

Insights

Positive asset growth contrasts with a growing stockholders’ deficit; adjusted data consistently shows a worse deficit than reported, emphasizing the impact of intangible adjustments on financial health assessment.

Total Asset Turnover

The reported total asset turnover ratio exhibited a stable trend of 1.2 in both 2018 and 2019 before experiencing a significant decline to 0.88 in 2020. Following this decrease, a gradual recovery was observed, with the ratio increasing to 1.01 in 2021 and continuing upward to 1.06 in 2022 and 1.09 in 2023. The adjusted total asset turnover ratio mirrored this pattern, starting slightly higher at 1.24 in 2018 and 2019, dropping sharply to 0.89 in 2020, and rebounding steadily thereafter to 1.11 by 2023. Overall, both reported and adjusted measures indicate a dip during 2020, likely reflecting external challenges, followed by a consistent improvement in asset utilization efficiency.

Return on Assets (ROA)

The reported ROA percentage showed a similar trend to asset turnover, starting at 14.31% in 2018 and rising to a peak of 16.34% in 2019. It then declined to 12.01% in 2020, which coincided with the dip in asset turnover. Subsequently, reported ROA improved progressively, reaching 14.95% in 2021, 15.91% in 2022, and slightly decreasing to 15.82% in 2023. The adjusted ROA followed a comparable trajectory but was consistently marginally higher than the reported figures throughout the period. It started at 14.79% in 2018, peaked at 16.86% in 2019, dropped to 12.27% in 2020, and then increased steadily to 16.12% in 2023. This pattern suggests that asset profitability was impacted notably in 2020 but regained strength in subsequent years, with adjustments for goodwill reflecting a more favorable performance.

Financial Leverage and Return on Equity (ROE)

No data were provided for financial leverage or return on equity, either reported or adjusted, across the observed periods. Consequently, no analysis can be made regarding leverage effects or equity returns.

Overall Observations

The data indicate that 2020 was a challenging year, marked by declines in both asset turnover and ROA, which may correlate with broader economic or industry-specific disruptions. The recovery in both metrics from 2021 onward indicates improving operational efficiency and profitability. The consistent slight premium of adjusted ratios over reported ones suggests that goodwill adjustments have a positive influence on the perception of asset usage and profitability. The absence of financial leverage and ROE data limits the ability to assess the impact of capital structure and equity returns on overall financial performance.

Total Assets

The reported total assets exhibit a consistent upward trend over the six-year period, increasing from approximately $9.35 billion in 2018 to nearly $16.0 billion in 2023. This represents a significant growth in asset base, with an especially notable jump between 2019 and 2020. The adjusted total assets, which likely exclude goodwill or other intangible assets, follow a very similar pattern but remain slightly lower each year, indicating a relatively stable proportion of goodwill or adjustments to total assets over time.

Total Asset Turnover

The reported total asset turnover ratio starts at 1.2 in 2018 and remains steady at that level into 2019. However, there is a sharp decline in 2020 to 0.88, indicating a reduction in efficiency in utilizing assets to generate revenue. From 2020 onward, this ratio shows a gradual recovery, reaching 1.09 by 2023 but still slightly below the initial levels observed in 2018 and 2019.

The adjusted total asset turnover shows a similar trajectory: stable at 1.24 in 2018 and 2019, dropping to 0.89 in 2020, and subsequently improving to 1.11 in 2023. The adjusted turnover consistently remains marginally higher than the reported turnover, suggesting that asset adjustments have an impact on the assessment of asset efficiency, but the overall trend and timing of changes align closely between reported and adjusted figures.

Overall Insights

The data reflect a company experiencing steady growth in asset base over the observed period, accompanied by a temporary drop in asset utilization efficiency in 2020, likely due to external factors impacting operational performance during that year. The recovery in turnover ratios over the subsequent years suggests improving operational effectiveness or revenue growth relative to the asset base. The parallel movement between reported and adjusted figures indicates that adjustments for goodwill or similar asset components do not materially alter the overall financial trends and performance insights.

Total Assets

The reported total assets show a consistent upward trend from 9.35 billion US dollars in 2018 to approximately 16.0 billion US dollars in 2023. This indicates steady growth in the company's asset base over the period. The adjusted total assets, which presumably exclude goodwill or other intangible adjustments, also exhibit a similar rising pattern, increasing from about 9.04 billion US dollars in 2018 to 15.7 billion US dollars in 2023. The parallel movement of reported and adjusted figures suggests that the proportion of goodwill or intangible assets relative to total assets remains relatively stable over time.

Stockholders’ Deficit

Both reported and adjusted stockholders’ deficits reveal a negative and volatile trend. The reported deficit decreases (improves) from -1.52 billion in 2018 to -0.88 billion in 2020, indicating a reduction in deficit during those years. However, from 2021 onward, the deficit widens markedly, reaching -4.35 billion US dollars in 2023. Similarly, the adjusted stockholders’ deficit follows this pattern, improving from -1.82 billion in 2018 to about -1.18 billion in 2020 before deteriorating to approximately -4.65 billion in 2023. This pattern reflects increasing financial challenges or losses affecting the equity section, becoming more pronounced in the latest years.

Financial Leverage

No data is provided for either reported or adjusted financial leverage ratios across the periods analyzed, preventing assessment of the company’s leverage trends or risk related to its capital structure.

Overall Observations

The data signals robust asset growth accompanied by a deepening stockholders’ deficit after 2020. The initial improvement in deficit through 2020 suggests a period of financial stabilization or incremental improvement. The rapid deterioration thereafter could indicate heightened financial strain or increased liabilities impacting shareholders’ equity. The stability in adjustments between reported and adjusted figures implies that goodwill adjustments do not materially alter the core financial trends observed. The absence of financial leverage data limits a full understanding of how the company’s capital structure has evolved in relation to these changes.

The financial data for the company reveals a consistent and worsening stockholders’ deficit over the six-year period from August 2018 to August 2023.

Reported Stockholders’ Deficit

Initially recorded at -1,520,355 thousand USD in August 2018, the reported stockholders’ deficit shows a fluctuating but overall increasing negative trend. It increased to -1,713,851 thousand USD in August 2019, then improved somewhat to -877,977 thousand USD by August 2020. However, this improvement was short-lived; the deficit expanded again to -1,797,536 thousand USD in August 2021 and saw a substantial rise to -3,538,913 thousand USD in August 2022, followed by a further deterioration to -4,349,894 thousand USD in August 2023.

Adjusted Stockholders’ Deficit

The adjusted deficit figures, which presumably take goodwill into account, follow a similar pattern but consistently register as more negative than the reported figures. Starting at -1,823,000 thousand USD in August 2018, the adjusted deficit deepened to -2,016,496 thousand USD in August 2019. A reduction was observed in August 2020 when the value decreased to -1,180,622 thousand USD, but this improvement did not sustain. The deficit again widened to -2,100,181 thousand USD by August 2021 and then grew dramatically to -3,841,558 thousand USD in August 2022, reaching -4,652,539 thousand USD in August 2023.

Reported and Adjusted ROE

Data for both reported and adjusted Return on Equity (ROE) are unavailable across all periods, precluding any analysis of profitability or returns on equity.

Overall, the data illustrates a significant deterioration in the company’s equity position over the period analyzed. Both reported and adjusted stockholders’ deficits have expanded markedly, especially from 2021 onward, indicating increasing financial strain or losses potentially exacerbated by adjustments related to goodwill. The lack of ROE data limits the analysis of profitability trends during this time.

Total Assets

The reported total assets show a consistent upward trend over the six-year period analyzed. The value increased from approximately 9.35 billion US dollars in 2018 to nearly 16.0 billion US dollars in 2023. The adjusted total assets, which account for goodwill adjustments, exhibit a similar increasing pattern, rising from about 9.04 billion US dollars in 2018 to roughly 15.68 billion US dollars in 2023. Despite adjustments, both measures reveal steady asset growth, with the gap between reported and adjusted assets remaining relatively stable.

Return on Assets (ROA)

Reported ROA displays some variability throughout the years, beginning at 14.31% in 2018, peaking at 16.34% in 2019, then declining substantially to 12.01% in 2020, before recovering and stabilizing near 15.8% in 2023. The adjusted ROA follows a comparable trajectory, slightly higher in each respective year, starting at 14.79% in 2018, rising to 16.86% in 2019, dropping to 12.27% in 2020, and steadily increasing to 16.12% in 2023. This pattern suggests that the adjustment for goodwill generally results in a more favorable asset profitability metric, indicating that the impact of goodwill on asset utilization is material but consistent over time.

Overall Insights

The company displays a steady expansion of its asset base over the period analyzed, with both reported and goodwill-adjusted figures increasing consistently. The asset efficiency, as measured by ROA, shows resilience despite a notable dip in 2020, likely reflective of external economic challenges during that year. The subsequent recovery and stabilization of ROA above 15% in recent years point to a sustained capacity to generate returns on the growing asset base. The adjusted metrics confirm that while goodwill influences total assets and profitability measures, the company's underlying asset performance remains strong and stable.