Analysis of Solvency Ratios
Solvency ratios also known as long-term debt ratios measure a company ability to meet long-term obligations.
Solvency Ratios (Summary)
Dollar General Corp., solvency ratios
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).
The solvency profile over the analyzed six-year period indicates a progressive increase in financial leverage and a corresponding decline in the capacity to service debt obligations. A transition from a conservative capital structure in 2019 to a more leveraged position is evident, with most solvency metrics peaking in February 2023 before experiencing a slight moderation in February 2024.
- Debt-to-Equity and Capitalization Trends
- The debt-to-equity ratio increased from 0.45 in 2019 to 1.04 in 2024, reaching a peak of 1.26 in 2023. This trend is significantly amplified when operating lease liabilities are included, where the ratio rose from 0.45 in 2019 to a peak of 3.19 in 2023, ending at 2.68 in 2024. Similarly, the debt-to-capital ratio grew from 0.31 to 0.51, while the ratio inclusive of lease liabilities climbed from 0.31 to 0.73.
- Asset Leverage and Financial Leverage
- Debt to assets remained relatively stable on a basic basis, moving from 0.22 in 2019 to 0.23 in 2024. However, the inclusion of operating lease liabilities reveals a substantial increase in asset-based leverage, rising from 0.22 in 2019 to 0.59 in 2024. Financial leverage exhibits a strong upward trend, increasing from 2.06 in 2019 to 4.56 in 2024, with a peak of 5.25 recorded in 2023.
- Coverage and Debt Serviceability
- Interest coverage ratios demonstrate a significant downward trend, falling from 21.18 in 2019 to 7.49 in 2024. This indicates a diminishing cushion for meeting interest expenses. Fixed charge coverage also trended lower over the long term, declining from 2.60 in 2019 to 2.02 in 2024, despite a mid-period peak of 3.22 in 2021.
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Debt Ratios
Coverage Ratios
Debt to Equity
Dollar General Corp., debt to equity calculation, comparison to benchmarks
| Feb 2, 2024 | Feb 3, 2023 | Jan 28, 2022 | Jan 29, 2021 | Jan 31, 2020 | Feb 1, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Current portion of long-term obligations | 768,645) | —) | —) | —) | 555) | 1,950) | |
| Long-term obligations, excluding current portion | 6,231,539) | 7,009,399) | 4,172,068) | 4,130,975) | 2,911,438) | 2,862,740) | |
| Total debt | 7,000,184) | 7,009,399) | 4,172,068) | 4,130,975) | 2,911,993) | 2,864,690) | |
| Shareholders’ equity | 6,749,119) | 5,541,772) | 6,261,986) | 6,661,238) | 6,702,500) | 6,417,393) | |
| Solvency Ratio | |||||||
| Debt to equity1 | 1.04 | 1.26 | 0.67 | 0.62 | 0.43 | 0.45 | |
| Benchmarks | |||||||
| Debt to Equity, Competitors2 | |||||||
| Costco Wholesale Corp. | 0.31 | 0.31 | 0.40 | 0.49 | 0.45 | — | |
| Target Corp. | 1.19 | 1.44 | 1.07 | 0.88 | — | — | |
| Walmart Inc. | 0.56 | 0.58 | 0.51 | 0.60 | — | — | |
| Debt to Equity, Sector | |||||||
| Consumer Staples Distribution & Retail | 0.58 | 0.61 | 0.55 | 0.62 | — | — | |
| Debt to Equity, Industry | |||||||
| Consumer Staples | 1.11 | 1.16 | 1.08 | 1.07 | — | — | |
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).
1 2024 Calculation
Debt to equity = Total debt ÷ Shareholders’ equity
= 7,000,184 ÷ 6,749,119 = 1.04
2 Click competitor name to see calculations.
The solvency profile exhibits a significant increase in leverage between February 2019 and February 2024, characterized by a substantial rise in total debt and fluctuating levels of shareholders' equity.
- Total Debt Trends
- A strong upward trajectory is evident in total debt, which increased from approximately $2.86 billion in 2019 to $7.00 billion by 2024. This growth was marked by two distinct surges: the first occurring between January 2020 and January 2021, and a more pronounced increase between January 2022 and February 2023, where debt levels rose by approximately $2.84 billion in a single fiscal year.
- Shareholders' Equity Fluctuations
- Equity remained relatively stable between 2019 and 2021, hovering between $6.4 billion and $6.7 billion. A contraction is observed starting in 2022, reaching a minimum of approximately $5.54 billion in February 2023. However, a significant recovery occurred by February 2024, with equity returning to $6.75 billion.
- Debt to Equity Ratio Analysis
- The debt to equity ratio shifted from a conservative 0.45 in 2019 to a peak of 1.26 in 2023. This peak indicates a period where liabilities exceeded equity, reflecting a heightened reliance on borrowed capital for financing. The ratio moderated to 1.04 in 2024, a correction driven primarily by the recovery in shareholders' equity while total debt remained nearly constant.
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Debt to Equity (including Operating Lease Liability)
Dollar General Corp., debt to equity (including operating lease liability) calculation, comparison to benchmarks
| Feb 2, 2024 | Feb 3, 2023 | Jan 28, 2022 | Jan 29, 2021 | Jan 31, 2020 | Feb 1, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Current portion of long-term obligations | 768,645) | —) | —) | —) | 555) | 1,950) | |
| Long-term obligations, excluding current portion | 6,231,539) | 7,009,399) | 4,172,068) | 4,130,975) | 2,911,438) | 2,862,740) | |
| Total debt | 7,000,184) | 7,009,399) | 4,172,068) | 4,130,975) | 2,911,993) | 2,864,690) | |
| Current portion of operating lease liabilities | 1,387,083) | 1,288,939) | 1,183,559) | 1,074,079) | 964,805) | —) | |
| Long-term operating lease liabilities, excluding current portion | 9,703,499) | 9,362,761) | 8,890,709) | 8,385,388) | 7,819,683) | —) | |
| Total debt (including operating lease liability) | 18,090,766) | 17,661,099) | 14,246,336) | 13,590,442) | 11,696,481) | 2,864,690) | |
| Shareholders’ equity | 6,749,119) | 5,541,772) | 6,261,986) | 6,661,238) | 6,702,500) | 6,417,393) | |
| Solvency Ratio | |||||||
| Debt to equity (including operating lease liability)1 | 2.68 | 3.19 | 2.28 | 2.04 | 1.75 | 0.45 | |
| Benchmarks | |||||||
| Debt to Equity (including Operating Lease Liability), Competitors2 | |||||||
| Costco Wholesale Corp. | 0.42 | 0.42 | 0.53 | 0.65 | 0.61 | — | |
| Target Corp. | 1.46 | 1.70 | 1.28 | 1.05 | — | — | |
| Walmart Inc. | 0.73 | 0.77 | 0.69 | 0.78 | — | — | |
| Debt to Equity (including Operating Lease Liability), Sector | |||||||
| Consumer Staples Distribution & Retail | 0.75 | 0.78 | 0.73 | 0.79 | — | — | |
| Debt to Equity (including Operating Lease Liability), Industry | |||||||
| Consumer Staples | 1.23 | 1.28 | 1.20 | 1.19 | — | — | |
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).
1 2024 Calculation
Debt to equity (including operating lease liability) = Total debt (including operating lease liability) ÷ Shareholders’ equity
= 18,090,766 ÷ 6,749,119 = 2.68
2 Click competitor name to see calculations.
The capital structure of the organization underwent a significant transformation between February 2019 and February 2024, characterized by a substantial increase in total leverage and a corresponding shift in the debt-to-equity balance.
- Total Debt Trends
- A sharp escalation in total debt, including operating lease liabilities, is observed beginning in 2020. Total obligations rose from approximately $2.86 billion in February 2019 to $11.70 billion by January 2020, representing a period of rapid liability expansion. This upward trajectory persisted over the subsequent years, reaching a maximum of $18.09 billion by February 2024.
- Shareholders' Equity Fluctuations
- Equity levels remained relatively stable during the initial period but experienced a gradual contraction from $6.70 billion in January 2020 to a low of $5.54 billion in February 2023. A recovery is evident in the most recent period, with shareholders' equity increasing to $6.75 billion by February 2024.
- Debt to Equity Ratio Analysis
- The solvency ratio demonstrates a steep increase from 0.45 in February 2019 to a peak of 3.19 in February 2023, indicating a heightened reliance on debt financing relative to equity. Although the ratio moderated to 2.68 by February 2024, the overall financial profile remains significantly more leveraged than at the baseline of the analyzed period.
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Debt to Capital
Dollar General Corp., debt to capital calculation, comparison to benchmarks
| Feb 2, 2024 | Feb 3, 2023 | Jan 28, 2022 | Jan 29, 2021 | Jan 31, 2020 | Feb 1, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Current portion of long-term obligations | 768,645) | —) | —) | —) | 555) | 1,950) | |
| Long-term obligations, excluding current portion | 6,231,539) | 7,009,399) | 4,172,068) | 4,130,975) | 2,911,438) | 2,862,740) | |
| Total debt | 7,000,184) | 7,009,399) | 4,172,068) | 4,130,975) | 2,911,993) | 2,864,690) | |
| Shareholders’ equity | 6,749,119) | 5,541,772) | 6,261,986) | 6,661,238) | 6,702,500) | 6,417,393) | |
| Total capital | 13,749,303) | 12,551,171) | 10,434,054) | 10,792,213) | 9,614,493) | 9,282,083) | |
| Solvency Ratio | |||||||
| Debt to capital1 | 0.51 | 0.56 | 0.40 | 0.38 | 0.30 | 0.31 | |
| Benchmarks | |||||||
| Debt to Capital, Competitors2 | |||||||
| Costco Wholesale Corp. | 0.24 | 0.24 | 0.28 | 0.33 | 0.31 | — | |
| Target Corp. | 0.54 | 0.59 | 0.52 | 0.47 | — | — | |
| Walmart Inc. | 0.36 | 0.37 | 0.34 | 0.38 | — | — | |
| Debt to Capital, Sector | |||||||
| Consumer Staples Distribution & Retail | 0.37 | 0.38 | 0.36 | 0.38 | — | — | |
| Debt to Capital, Industry | |||||||
| Consumer Staples | 0.53 | 0.54 | 0.52 | 0.52 | — | — | |
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).
1 2024 Calculation
Debt to capital = Total debt ÷ Total capital
= 7,000,184 ÷ 13,749,303 = 0.51
2 Click competitor name to see calculations.
An analysis of the solvency metrics from February 2019 to February 2024 reveals a significant increase in the organization's reliance on debt financing. The overall trend indicates a shift toward a more leveraged capital structure, with total debt more than doubling over the six-year period.
- Total Debt Trajectory
- Total debt remained relatively stable between 2019 and 2020, but experienced a sharp increase in 2021, rising from approximately 2.91 billion to 4.13 billion. A more pronounced surge occurred between 2022 and 2023, where debt levels escalated from 4.17 billion to 7.01 billion. As of February 2, 2024, total debt stabilized at approximately 7.00 billion.
- Total Capital Expansion
- Total capital exhibited a consistent upward trajectory, growing from 9.28 billion in 2019 to 13.75 billion in 2024. Aside from a minor contraction in 2022, the growth in total capital has been steady, although it has been outpaced by the growth in total debt for much of the period.
- Debt to Capital Ratio Trends
- The debt to capital ratio remained low and stable at 0.31 and 0.30 during 2019 and 2020. A steady increase followed, with the ratio rising to 0.38 in 2021 and 0.40 in 2022. The most significant spike occurred in 2023, reaching a peak of 0.56, which indicates that debt constituted over half of the total capital structure. A slight reduction to 0.51 was observed by February 2024, suggesting a modest improvement in the solvency profile or an increase in equity components relative to debt.
The progression of these figures demonstrates a strategic transition toward higher leverage, particularly between 2021 and 2023. While the most recent data shows a slight correction in the debt to capital ratio, the long-term trend reflects a substantial increase in the proportion of debt within the total capital base.
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Debt to Capital (including Operating Lease Liability)
Dollar General Corp., debt to capital (including operating lease liability) calculation, comparison to benchmarks
| Feb 2, 2024 | Feb 3, 2023 | Jan 28, 2022 | Jan 29, 2021 | Jan 31, 2020 | Feb 1, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Current portion of long-term obligations | 768,645) | —) | —) | —) | 555) | 1,950) | |
| Long-term obligations, excluding current portion | 6,231,539) | 7,009,399) | 4,172,068) | 4,130,975) | 2,911,438) | 2,862,740) | |
| Total debt | 7,000,184) | 7,009,399) | 4,172,068) | 4,130,975) | 2,911,993) | 2,864,690) | |
| Current portion of operating lease liabilities | 1,387,083) | 1,288,939) | 1,183,559) | 1,074,079) | 964,805) | —) | |
| Long-term operating lease liabilities, excluding current portion | 9,703,499) | 9,362,761) | 8,890,709) | 8,385,388) | 7,819,683) | —) | |
| Total debt (including operating lease liability) | 18,090,766) | 17,661,099) | 14,246,336) | 13,590,442) | 11,696,481) | 2,864,690) | |
| Shareholders’ equity | 6,749,119) | 5,541,772) | 6,261,986) | 6,661,238) | 6,702,500) | 6,417,393) | |
| Total capital (including operating lease liability) | 24,839,885) | 23,202,871) | 20,508,322) | 20,251,680) | 18,398,981) | 9,282,083) | |
| Solvency Ratio | |||||||
| Debt to capital (including operating lease liability)1 | 0.73 | 0.76 | 0.69 | 0.67 | 0.64 | 0.31 | |
| Benchmarks | |||||||
| Debt to Capital (including Operating Lease Liability), Competitors2 | |||||||
| Costco Wholesale Corp. | 0.30 | 0.30 | 0.35 | 0.39 | 0.38 | — | |
| Target Corp. | 0.59 | 0.63 | 0.56 | 0.51 | — | — | |
| Walmart Inc. | 0.42 | 0.43 | 0.41 | 0.44 | — | — | |
| Debt to Capital (including Operating Lease Liability), Sector | |||||||
| Consumer Staples Distribution & Retail | 0.43 | 0.44 | 0.42 | 0.44 | — | — | |
| Debt to Capital (including Operating Lease Liability), Industry | |||||||
| Consumer Staples | 0.55 | 0.56 | 0.54 | 0.54 | — | — | |
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).
1 2024 Calculation
Debt to capital (including operating lease liability) = Total debt (including operating lease liability) ÷ Total capital (including operating lease liability)
= 18,090,766 ÷ 24,839,885 = 0.73
2 Click competitor name to see calculations.
A substantial increase in leverage is observed over the analyzed period. Total debt, inclusive of operating lease liabilities, rose from US$ 2.86 billion in 2019 to US$ 18.09 billion in 2024. This expansion in obligations was accompanied by a corresponding increase in total capital, which grew from US$ 9.28 billion to US$ 24.84 billion.
- Debt to Capital Ratio Progression
- The ratio experienced a sharp increase from 0.31 in 2019 to 0.64 in 2020, indicating a rapid shift in the capital structure. Following this initial surge, the ratio continued to climb incrementally, reaching a peak of 0.76 in 2023 before recording a slight moderation to 0.73 in 2024.
- Debt Accumulation Patterns
- The most significant acceleration in total debt occurred between February 2019 and January 2020, with an increase of approximately US$ 8.83 billion. Debt growth persisted through the following years, with another notable increase observed between 2022 and 2023, where debt rose from US$ 14.25 billion to US$ 17.66 billion.
- Capital Structure Composition
- The consistent upward trend in the debt to capital ratio suggests that debt and lease liabilities expanded at a faster rate than equity or other capital components. Consequently, the proportion of the capital base funded by debt increased from 31% in 2019 to 73% by 2024, reflecting a more leveraged solvency profile.
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Debt to Assets
Dollar General Corp., debt to assets calculation, comparison to benchmarks
| Feb 2, 2024 | Feb 3, 2023 | Jan 28, 2022 | Jan 29, 2021 | Jan 31, 2020 | Feb 1, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Current portion of long-term obligations | 768,645) | —) | —) | —) | 555) | 1,950) | |
| Long-term obligations, excluding current portion | 6,231,539) | 7,009,399) | 4,172,068) | 4,130,975) | 2,911,438) | 2,862,740) | |
| Total debt | 7,000,184) | 7,009,399) | 4,172,068) | 4,130,975) | 2,911,993) | 2,864,690) | |
| Total assets | 30,795,591) | 29,083,367) | 26,327,371) | 25,862,624) | 22,825,084) | 13,204,038) | |
| Solvency Ratio | |||||||
| Debt to assets1 | 0.23 | 0.24 | 0.16 | 0.16 | 0.13 | 0.22 | |
| Benchmarks | |||||||
| Debt to Assets, Competitors2 | |||||||
| Costco Wholesale Corp. | 0.11 | 0.11 | 0.13 | 0.14 | 0.15 | — | |
| Target Corp. | 0.29 | 0.30 | 0.25 | 0.25 | — | — | |
| Walmart Inc. | 0.19 | 0.18 | 0.17 | 0.19 | — | — | |
| Debt to Assets, Sector | |||||||
| Consumer Staples Distribution & Retail | 0.19 | 0.19 | 0.18 | 0.19 | — | — | |
| Debt to Assets, Industry | |||||||
| Consumer Staples | 0.31 | 0.31 | 0.30 | 0.30 | — | — | |
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).
1 2024 Calculation
Debt to assets = Total debt ÷ Total assets
= 7,000,184 ÷ 30,795,591 = 0.23
2 Click competitor name to see calculations.
The analysis of the company's solvency over the six-year period reveals a dynamic shift in the capital structure, characterized by substantial expansions in both the total asset base and total debt obligations.
- Total Asset Expansion
- A significant upward trajectory in total assets is observed, increasing from $13.2 billion in February 2019 to $30.8 billion by February 2024. The most aggressive growth phase occurred between 2019 and 2020, where assets increased by approximately 73%, providing a larger base to support leverage.
- Debt Accumulation Trends
- Total debt exhibited a strong overall increase, rising from $2.86 billion in 2019 to $7.00 billion in 2024. Notable surges in borrowing occurred between 2020 and 2021, and a more pronounced increase was recorded between 2022 and 2023, where total debt rose from $4.17 billion to $7.01 billion.
- Debt to Assets Ratio Interpretation
- The debt to assets ratio fluctuated throughout the period, reflecting the varying rates of asset growth versus debt accumulation. The ratio decreased from 0.22 in 2019 to a period low of 0.13 in 2020, driven by the rapid expansion of assets. After maintaining a stable level of 0.16 through 2021 and 2022, the ratio peaked at 0.24 in February 2023 following a sharp increase in total debt. As of February 2024, the ratio marginally declined to 0.23, indicating that while the company is more leveraged than it was in 2020, the ratio remains relatively stable compared to the 2019 baseline.
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Debt to Assets (including Operating Lease Liability)
Dollar General Corp., debt to assets (including operating lease liability) calculation, comparison to benchmarks
| Feb 2, 2024 | Feb 3, 2023 | Jan 28, 2022 | Jan 29, 2021 | Jan 31, 2020 | Feb 1, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Current portion of long-term obligations | 768,645) | —) | —) | —) | 555) | 1,950) | |
| Long-term obligations, excluding current portion | 6,231,539) | 7,009,399) | 4,172,068) | 4,130,975) | 2,911,438) | 2,862,740) | |
| Total debt | 7,000,184) | 7,009,399) | 4,172,068) | 4,130,975) | 2,911,993) | 2,864,690) | |
| Current portion of operating lease liabilities | 1,387,083) | 1,288,939) | 1,183,559) | 1,074,079) | 964,805) | —) | |
| Long-term operating lease liabilities, excluding current portion | 9,703,499) | 9,362,761) | 8,890,709) | 8,385,388) | 7,819,683) | —) | |
| Total debt (including operating lease liability) | 18,090,766) | 17,661,099) | 14,246,336) | 13,590,442) | 11,696,481) | 2,864,690) | |
| Total assets | 30,795,591) | 29,083,367) | 26,327,371) | 25,862,624) | 22,825,084) | 13,204,038) | |
| Solvency Ratio | |||||||
| Debt to assets (including operating lease liability)1 | 0.59 | 0.61 | 0.54 | 0.53 | 0.51 | 0.22 | |
| Benchmarks | |||||||
| Debt to Assets (including Operating Lease Liability), Competitors2 | |||||||
| Costco Wholesale Corp. | 0.14 | 0.15 | 0.17 | 0.19 | 0.20 | — | |
| Target Corp. | 0.35 | 0.36 | 0.31 | 0.29 | — | — | |
| Walmart Inc. | 0.24 | 0.24 | 0.23 | 0.25 | — | — | |
| Debt to Assets (including Operating Lease Liability), Sector | |||||||
| Consumer Staples Distribution & Retail | 0.24 | 0.24 | 0.23 | 0.25 | — | — | |
| Debt to Assets (including Operating Lease Liability), Industry | |||||||
| Consumer Staples | 0.34 | 0.34 | 0.33 | 0.33 | — | — | |
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).
1 2024 Calculation
Debt to assets (including operating lease liability) = Total debt (including operating lease liability) ÷ Total assets
= 18,090,766 ÷ 30,795,591 = 0.59
2 Click competitor name to see calculations.
A comprehensive expansion of the balance sheet is evident from February 2019 through February 2024. Both total assets and total debt, including operating lease liabilities, experienced substantial growth, though the rate of debt accumulation significantly outpaced asset growth during the initial phase of the analyzed period.
- Debt to Assets Ratio Trend
- The debt to assets ratio shifted from a conservative 0.22 in February 2019 to 0.51 by January 2020, marking a rapid increase in financial leverage. This upward trend persisted through February 2023, when the ratio reached a peak of 0.61. A slight moderation occurred by February 2024, with the ratio declining to 0.59, suggesting a marginal reduction in the proportion of assets financed by debt and lease obligations.
- Debt Accumulation and Scale
- Total debt obligations, including operating lease liabilities, grew from approximately $2.86 billion in 2019 to $18.09 billion in 2024. The most aggressive increase occurred between February 2019 and January 2020, during which total debt increased by approximately $8.83 billion. Subsequent growth remained steady, with debt increasing by roughly $6.40 billion between 2020 and 2024.
- Asset Growth and Solvency Implications
- Total assets rose from $13.20 billion to $30.80 billion over the six-year period. While the growth in assets demonstrates an expanding operational scale, the concurrent rise in the debt to assets ratio indicates a strategic shift toward a more levered capital structure. By February 2024, debt and lease liabilities financed approximately 59% of the company's total asset base, compared to only 22% at the start of the period.
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Financial Leverage
Dollar General Corp., financial leverage calculation, comparison to benchmarks
| Feb 2, 2024 | Feb 3, 2023 | Jan 28, 2022 | Jan 29, 2021 | Jan 31, 2020 | Feb 1, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Total assets | 30,795,591) | 29,083,367) | 26,327,371) | 25,862,624) | 22,825,084) | 13,204,038) | |
| Shareholders’ equity | 6,749,119) | 5,541,772) | 6,261,986) | 6,661,238) | 6,702,500) | 6,417,393) | |
| Solvency Ratio | |||||||
| Financial leverage1 | 4.56 | 5.25 | 4.20 | 3.88 | 3.41 | 2.06 | |
| Benchmarks | |||||||
| Financial Leverage, Competitors2 | |||||||
| Costco Wholesale Corp. | 2.96 | 2.75 | 3.11 | 3.37 | 3.04 | — | |
| Target Corp. | 4.12 | 4.75 | 4.20 | 3.55 | — | — | |
| Walmart Inc. | 3.01 | 3.17 | 2.94 | 3.12 | — | — | |
| Financial Leverage, Sector | |||||||
| Consumer Staples Distribution & Retail | 3.12 | 3.24 | 3.11 | 3.21 | — | — | |
| Financial Leverage, Industry | |||||||
| Consumer Staples | 3.62 | 3.71 | 3.59 | 3.59 | — | — | |
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).
1 2024 Calculation
Financial leverage = Total assets ÷ Shareholders’ equity
= 30,795,591 ÷ 6,749,119 = 4.56
2 Click competitor name to see calculations.
The company's financial structure has undergone a significant transformation between February 2019 and February 2024, characterized by an aggressive expansion of the asset base paired with relatively stagnant equity growth. This divergence has led to a marked increase in the company's reliance on debt financing over the analyzed period.
- Total Asset Expansion
- A consistent upward trend in total assets is observed, with values increasing from 13.2 billion US$ in 2019 to 30.8 billion US$ by 2024. The most substantial increase occurred between February 2019 and January 2020, where assets grew by approximately 72%, establishing a higher baseline for subsequent years.
- Shareholders' Equity Trends
- Shareholders' equity remained relatively flat, starting at 6.4 billion US$ in 2019 and ending at 6.7 billion US$ in 2024. A notable dip occurred in February 2023, when equity fell to 5.5 billion US$, before recovering in the following year. The lack of proportionate growth in equity relative to assets indicates that asset acquisition was primarily funded through liabilities.
- Financial Leverage Trajectory
- The financial leverage ratio demonstrates a steady climb from 2.06 in 2019 to a peak of 5.25 in February 2023. This trajectory reflects a systematic increase in financial risk and gearing. However, a correction is evident in February 2024, as the ratio declined to 4.56, suggesting a strategic shift toward deleveraging or a strengthening of the equity position.
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Interest Coverage
Dollar General Corp., interest coverage calculation, comparison to benchmarks
| Feb 2, 2024 | Feb 3, 2023 | Jan 28, 2022 | Jan 29, 2021 | Jan 31, 2020 | Feb 1, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Net income | 1,661,274) | 2,415,989) | 2,399,232) | 2,655,050) | 1,712,555) | 1,589,472) | |
| Add: Income tax expense | 458,245) | 700,625) | 663,917) | 749,330) | 489,175) | 425,944) | |
| Add: Interest expense | 326,781) | 211,273) | 157,526) | 150,385) | 100,574) | 99,871) | |
| Earnings before interest and tax (EBIT) | 2,446,300) | 3,327,887) | 3,220,675) | 3,554,765) | 2,302,304) | 2,115,287) | |
| Solvency Ratio | |||||||
| Interest coverage1 | 7.49 | 15.75 | 20.45 | 23.64 | 22.89 | 21.18 | |
| Benchmarks | |||||||
| Interest Coverage, Competitors2 | |||||||
| Costco Wholesale Corp. | 58.63 | 54.04 | 50.62 | 40.06 | 34.54 | — | |
| Target Corp. | 11.55 | 8.15 | 22.16 | 6.68 | — | — | |
| Walmart Inc. | 9.14 | 9.00 | 10.38 | 9.88 | — | — | |
| Interest Coverage, Sector | |||||||
| Consumer Staples Distribution & Retail | 12.00 | 11.46 | 14.77 | 10.47 | — | — | |
| Interest Coverage, Industry | |||||||
| Consumer Staples | 10.92 | 11.37 | 15.69 | 11.46 | — | — | |
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).
1 2024 Calculation
Interest coverage = EBIT ÷ Interest expense
= 2,446,300 ÷ 326,781 = 7.49
2 Click competitor name to see calculations.
An analysis of the solvency metrics indicates a significant deterioration in the capacity to service interest obligations over the observed six-year period. While the company maintained a robust safety margin through early 2021, a subsequent combination of declining operating earnings and rising borrowing costs has led to a substantial contraction in the interest coverage ratio.
- Earnings Before Interest and Tax (EBIT) Trends
- Operating earnings experienced initial growth, rising from $2,115,287 thousand in 2019 to a peak of $3,554,765 thousand in 2021. Following this peak, EBIT entered a period of volatility and decline, falling to $2,446,300 thousand by February 2, 2024, representing a decrease of approximately 31% from its 2021 high.
- Interest Expense Trajectory
- Interest expenses have followed a consistent upward trend throughout the period. After remaining stable between 2019 and 2020, costs began to accelerate, rising from $99,871 thousand in 2019 to $326,781 thousand in 2024. This represents more than a threefold increase in annual interest obligations.
- Interest Coverage Ratio Analysis
- The interest coverage ratio peaked at 23.64 in 2021, indicating a very strong ability to meet interest payments from operating profits. However, a sharp downward trend is observed from 2022 onward, with the ratio falling to 7.49 by February 2, 2024. This decline is driven by the dual impact of diminishing EBIT and escalating interest expenses, which has significantly narrowed the company's financial cushion.
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Fixed Charge Coverage
Dollar General Corp., fixed charge coverage calculation, comparison to benchmarks
| Feb 2, 2024 | Feb 3, 2023 | Jan 28, 2022 | Jan 29, 2021 | Jan 31, 2020 | Feb 1, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Net income | 1,661,274) | 2,415,989) | 2,399,232) | 2,655,050) | 1,712,555) | 1,589,472) | |
| Add: Income tax expense | 458,245) | 700,625) | 663,917) | 749,330) | 489,175) | 425,944) | |
| Add: Interest expense | 326,781) | 211,273) | 157,526) | 150,385) | 100,574) | 99,871) | |
| Earnings before interest and tax (EBIT) | 2,446,300) | 3,327,887) | 3,220,675) | 3,554,765) | 2,302,304) | 2,115,287) | |
| Add: Operating lease cost | 1,750,000) | 1,610,000) | 1,490,000) | 1,380,000) | 1,270,000) | 1,159,085) | |
| Earnings before fixed charges and tax | 4,196,300) | 4,937,887) | 4,710,675) | 4,934,765) | 3,572,304) | 3,274,372) | |
| Interest expense | 326,781) | 211,273) | 157,526) | 150,385) | 100,574) | 99,871) | |
| Operating lease cost | 1,750,000) | 1,610,000) | 1,490,000) | 1,380,000) | 1,270,000) | 1,159,085) | |
| Fixed charges | 2,076,781) | 1,821,273) | 1,647,526) | 1,530,385) | 1,370,574) | 1,258,956) | |
| Solvency Ratio | |||||||
| Fixed charge coverage1 | 2.02 | 2.71 | 2.86 | 3.22 | 2.61 | 2.60 | |
| Benchmarks | |||||||
| Fixed Charge Coverage, Competitors2 | |||||||
| Costco Wholesale Corp. | 22.50 | 19.10 | 18.23 | 15.30 | 14.03 | — | |
| Target Corp. | 6.04 | 4.62 | 12.02 | 5.24 | — | — | |
| Walmart Inc. | 5.40 | 4.84 | 5.38 | 5.16 | — | — | |
| Fixed Charge Coverage, Sector | |||||||
| Consumer Staples Distribution & Retail | 6.71 | 5.95 | 7.41 | 5.88 | — | — | |
| Fixed Charge Coverage, Industry | |||||||
| Consumer Staples | 7.38 | 7.41 | 9.12 | 7.50 | — | — | |
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).
1 2024 Calculation
Fixed charge coverage = Earnings before fixed charges and tax ÷ Fixed charges
= 4,196,300 ÷ 2,076,781 = 2.02
2 Click competitor name to see calculations.
The solvency profile exhibits a period of expansion followed by a notable contraction in coverage capacity. While the company maintained relatively stable coverage between 2019 and 2020, a significant peak in 2021 was followed by a three-year consecutive decline, culminating in a multi-year low by February 2024.
- Fixed Charge Coverage Ratio
- The ratio peaked at 3.22 in 2021, reflecting an enhanced ability to meet fixed obligations. However, the ratio subsequently deteriorated, falling to 2.86 in 2022, 2.71 in 2023, and reaching 2.02 by February 2024. This downward trajectory indicates a tightening of the financial cushion available to service fixed charges.
- Earnings Before Fixed Charges and Tax
- Earnings experienced an overall upward trend from 3.27 billion in 2019 to a high of 4.94 billion in 2023. This growth was interrupted by a sharp decline in the most recent period, where earnings fell to 4.20 billion in 2024. This reduction in operating profitability is a primary driver behind the weakened coverage ratio.
- Fixed Charges
- A consistent and linear increase in fixed charges is observed throughout the period. Obligations rose steadily from 1.26 billion in 2019 to 2.08 billion in 2024. The fact that fixed charges increased every year, regardless of the volatility in earnings, has created a compounding effect that reduced the overall solvency margin by the end of the analysis period.
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