Analysis of Debt
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- Statement of Comprehensive Income
- Common-Size Income Statement
- Analysis of Liquidity Ratios
- Enterprise Value to FCFF (EV/FCFF)
- Capital Asset Pricing Model (CAPM)
- Return on Equity (ROE) since 2010
- Debt to Equity since 2010
- Price to Earnings (P/E) since 2010
- Price to Sales (P/S) since 2010
- Aggregate Accruals
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Total Debt (Carrying Amount)
Dollar General Corp., balance sheet: debt
US$ in thousands
Based on: 10-K (reporting date: 2024-02-02), 10-K (reporting date: 2023-02-03), 10-K (reporting date: 2022-01-28), 10-K (reporting date: 2021-01-29), 10-K (reporting date: 2020-01-31), 10-K (reporting date: 2019-02-01).
- Current Portion of Long-Term Obligations
- Initially, the current portion of long-term obligations was relatively low, recorded at 1,950 thousand US dollars in early 2019 and then decreased to 555 thousand US dollars by early 2020. Data for the subsequent two years is absent, but a significant increase is observed in early 2024, reaching 768,645 thousand US dollars, indicating a substantial rise in short-term debt obligations due within the next year.
- Long-Term Obligations, Excluding Current Portion
- The long-term obligations excluding the current portion show an overall increasing trend from 2,862,740 thousand US dollars in 2019 to a peak of 7,009,399 thousand US dollars in early 2023. Notably, there is a considerable rise between 2021 and 2023. However, in 2024, this value decreases to 6,231,539 thousand US dollars, suggesting partial repayment or reclassification of long-term debt.
- Total Long-Term Obligations, Including Current Portion
- Total long-term obligations remained almost stable around 2,864,690 to 2,911,993 thousand US dollars between 2019 and 2020. A marked increase occurs in 2021 and 2022 to over 4.1 million thousand US dollars, followed by another substantial rise to approximately 7 million thousand US dollars in 2023. In 2024, the total carrying amount slightly decreases to 7,000,184 thousand US dollars. The spike reflects significant debt issuance or refinancing activities, and the slight decline may be due to repayments or debt reclassification.
- General Observations
- The debt structure indicates dynamic management of obligations over the period analyzed. The pronounced increase in both current and non-current portions in the most recent year suggests a considerable restructuring of liabilities, with a shift towards higher short-term obligations. This pattern may imply increased refinancing needs or a strategic change in the debt profile. The fluctuations in long-term obligations emphasize active debt management, potentially linked to funding corporate activities or investments.
Total Debt (Fair Value)
| Feb 2, 2024 | |
|---|---|
| Selected Financial Data (US$ in thousands) | |
| Total long-term obligations, including current portion (fair value) | |
| Financial Ratio | |
| Debt, fair value to carrying amount ratio | |
Based on: 10-K (reporting date: 2024-02-02).
Weighted-average Interest Rate on Debt
Weighted average borrowing rate:
| Interest rate | Debt amount1 | Interest rate × Debt amount | Weighted-average interest rate2 |
|---|---|---|---|
| Total | |||
Based on: 10-K (reporting date: 2024-02-02).
1 US$ in thousands
2 Weighted-average interest rate = 100 × ÷ =
Interest Costs Incurred
Dollar General Corp., interest costs incurred
US$ in thousands
| 12 months ended: | Feb 2, 2024 | Feb 3, 2023 | Jan 28, 2022 | Jan 29, 2021 | Jan 31, 2020 | Feb 1, 2019 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest expense | |||||||||||||
| Interest costs capitalized | |||||||||||||
| Interest costs incurred |
Based on: 10-K (reporting date: 2024-02-02), 10-K (reporting date: 2023-02-03), 10-K (reporting date: 2022-01-28), 10-K (reporting date: 2021-01-29), 10-K (reporting date: 2020-01-31), 10-K (reporting date: 2019-02-01).
- Interest Expense
- The interest expense exhibits a rising trend over the analyzed periods. Starting at $99,871 thousand in early 2019, it increased modestly to $100,574 thousand in 2020. Subsequent years show a sharper rise, reaching $150,385 thousand in 2021 and continuing upward to $157,526 thousand in 2022. The increase becomes more pronounced in 2023 and 2024, with values of $211,273 thousand and $326,781 thousand respectively, indicating a significant escalation in interest expenses in the most recent years.
- Interest Costs Capitalized
- The interest costs capitalized display a more fluctuating pattern. Beginning at $3,700 thousand in 2019, the figure declines to $2,700 thousand in 2020 and drops sharply to $100 thousand in 2021. In 2022, it moderately increases to $1,200 thousand, then rises further in 2023 to $4,800 thousand and peaks at $12,500 thousand in 2024. This variability suggests changing capital investment activities or accounting policies affecting capitalization.
- Interest Costs Incurred
- The total interest costs incurred, summing expense and capitalized costs, mirror the upward trajectory observed in other interest-related metrics. From $103,571 thousand in 2019, costs remain nearly stable through 2020 at $103,274 thousand, then climb significantly to $150,485 thousand in 2021 and $158,726 thousand in 2022. The increase accelerates in the last two years, reaching $216,073 thousand in 2023 and $339,281 thousand in 2024. This upward momentum highlights increasing financing costs overall.
- Summary Insights
- Overall, interest-related expenditures demonstrate a marked escalation over the six-year period, with particularly notable increases starting in 2021. While interest expense consistently rises, the capitalized costs show more volatility but contribute to the heightened total interest costs in recent years. This pattern may indicate growing debt levels, higher interest rates, or expanded borrowing activities that elevate financing expenses and associated capitalized interest.
Adjusted Interest Coverage Ratio
Based on: 10-K (reporting date: 2024-02-02), 10-K (reporting date: 2023-02-03), 10-K (reporting date: 2022-01-28), 10-K (reporting date: 2021-01-29), 10-K (reporting date: 2020-01-31), 10-K (reporting date: 2019-02-01).
2024 Calculations
1 Interest coverage ratio (without capitalized interest) = EBIT ÷ Interest expense
= ÷ =
2 Adjusted interest coverage ratio (with capitalized interest) = EBIT ÷ Interest costs incurred
= ÷ =
- Interest Coverage Ratio (without capitalized interest)
-
The interest coverage ratio exhibited a declining trend over the analyzed periods. Starting from a high of 23.64 in January 2021, the ratio decreased moderately to 20.45 in January 2022. From that point, the decline accelerated sharply, reaching 15.75 in February 2023 and further dropping to 7.49 by February 2024. This significant reduction indicates a weakening ability to cover interest expenses solely from operating earnings over time.
- Adjusted Interest Coverage Ratio (with capitalized interest)
-
The adjusted interest coverage ratio, which includes capitalized interest, follows a similar downward pattern. It rose from 20.42 in February 2019 to peak at 23.62 in January 2021. Subsequently, it declined steadily to 20.29 in January 2022 and then experienced sharp decreases to 15.4 in February 2023 and 7.21 in February 2024. This also reflects a reduced cushion for meeting interest obligations when considering capitalized interest, emphasizing increased financial pressure.
- Overall Analysis
-
Both metrics reveal a consistent deterioration in the company's capacity to service interest expenses across the measured periods. The nearly threefold decrease in interest coverage ratios from early 2021 to early 2024 suggests increased financial leverage or reduced earnings relative to interest expenses. This trend may warrant further investigation into the underlying causes, such as rising debt levels, increasing interest costs, or declining operational profitability.