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)
Debt Ratios
Coverage Ratios
Sysco Corp., solvency ratios
Based on: 10-K (reporting date: 2024-06-29), 10-K (reporting date: 2023-07-01), 10-K (reporting date: 2022-07-02), 10-K (reporting date: 2021-07-03), 10-K (reporting date: 2020-06-27), 10-K (reporting date: 2019-06-29).
The solvency profile exhibits a significant volatility spike in 2020, followed by a multi-year trend toward stabilization. The most pronounced shifts are evident in leverage and coverage ratios, while capital structure proportions remained relatively more consistent over the analyzed period.
- Leverage and Equity Ratios
- Debt to equity and financial leverage experienced a sharp increase in 2020, with debt to equity rising from 3.26 to 12.47 and financial leverage peaking at 19.53. A subsequent downward trend occurred through 2023, although values remained elevated compared to 2019 levels. As of June 2024, the debt to equity ratio stood at 6.44, indicating a sustained higher reliance on debt relative to equity than in the pre-2020 period.
- Asset and Capital Proportions
- Debt to assets peaked in 2020 at 0.64 before normalizing to 0.48 by June 2024. Debt to capital ratios showed less volatility than equity-based metrics, fluctuating within a range between 0.77 and 0.93. This suggests that while absolute debt levels shifted, the proportional weight of debt within the total capital base remained relatively stable after the initial 2020 increase.
- Coverage and Solvency Capacity
- Interest and fixed charge coverage ratios saw a severe contraction between 2020 and 2021, with interest coverage dropping from 6.57 to a low of 1.66. However, a strong recovery trend is observed from 2022 onward, with interest coverage returning to 5.23 and fixed charge coverage to 4.37 by June 2024, signaling a restoration of the capacity to service debt obligations from operating earnings.
- Impact of Operating Leases
- The inclusion of operating lease liabilities consistently elevates solvency ratios across all metrics. The variance between standard debt ratios and lease-inclusive ratios is most prominent in the debt to equity and debt to assets metrics, though the overall trend lines remain identical, indicating that lease liabilities are a constant factor in the capital structure.
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Debt to Equity
Sysco Corp., debt to equity calculation, comparison to benchmarks
| Jun 29, 2024 | Jul 1, 2023 | Jul 2, 2022 | Jul 3, 2021 | Jun 27, 2020 | Jun 29, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Current maturities of long-term debt | 469) | 63) | 581) | 495) | 1,544) | 41) | |
| Long-term debt, excluding current maturities | 11,513) | 10,348) | 10,067) | 10,588) | 12,902) | 8,122) | |
| Total debt | 11,982) | 10,411) | 10,648) | 11,083) | 14,447) | 8,163) | |
| Shareholders’ equity | 1,860) | 2,009) | 1,382) | 1,553) | 1,159) | 2,503) | |
| Solvency Ratio | |||||||
| Debt to equity1 | 6.44 | 5.18 | 7.70 | 7.14 | 12.47 | 3.26 | |
| Benchmarks | |||||||
| Debt to Equity, Competitors2 | |||||||
| Costco Wholesale Corp. | 0.31 | 0.31 | 0.40 | 0.49 | — | — | |
| 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: 2024-06-29), 10-K (reporting date: 2023-07-01), 10-K (reporting date: 2022-07-02), 10-K (reporting date: 2021-07-03), 10-K (reporting date: 2020-06-27), 10-K (reporting date: 2019-06-29).
1 2024 Calculation
Debt to equity = Total debt ÷ Shareholders’ equity
= 11,982 ÷ 1,860 = 6.44
2 Click competitor name to see calculations.
The solvency profile over the six-year period is characterized by a significant spike in leverage during 2020, followed by a gradual deleveraging process and a recent modest increase in the debt-to-equity ratio.
- Total Debt Trends
- Total debt experienced a sharp increase from US$ 8,163 million in 2019 to a peak of US$ 14,447 million in 2020. A consistent downward trend followed over the next three years, with debt levels receding to US$ 10,411 million by 2023, before rising again to US$ 11,982 million in 2024.
- Shareholders' Equity Fluctuations
- Equity saw a substantial contraction in 2020, dropping from US$ 2,503 million to US$ 1,159 million. A recovery phase was observed between 2021 and 2023, where equity climbed to a high of US$ 2,009 million, followed by a slight decrease to US$ 1,860 million in 2024.
- Debt to Equity Ratio Analysis
- The debt to equity ratio exhibited extreme volatility, surging from 3.26 in 2019 to 12.47 in 2020, driven by the simultaneous increase in total debt and the decline in shareholders' equity. This ratio improved significantly to 5.18 by 2023 as the balance sheet stabilized, although it rose to 6.44 in 2024.
The analysis indicates a period of heightened financial risk centered around 2020, which was subsequently mitigated through debt reduction and the rebuilding of equity. However, the most recent figures reflect a renewed trend toward higher leverage, as total debt increased while shareholders' equity declined in the final period.
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Debt to Equity (including Operating Lease Liability)
Sysco Corp., debt to equity (including operating lease liability) calculation, comparison to benchmarks
| Jun 29, 2024 | Jul 1, 2023 | Jul 2, 2022 | Jul 3, 2021 | Jun 27, 2020 | Jun 29, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Current maturities of long-term debt | 469) | 63) | 581) | 495) | 1,544) | 41) | |
| Long-term debt, excluding current maturities | 11,513) | 10,348) | 10,067) | 10,588) | 12,902) | 8,122) | |
| Total debt | 11,982) | 10,411) | 10,648) | 11,083) | 14,447) | 8,163) | |
| Current operating lease liabilities | 125) | 99) | 106) | 103) | 107) | —) | |
| Long-term operating lease liabilities | 838) | 656) | 636) | 634) | 523) | —) | |
| Total debt (including operating lease liability) | 12,945) | 11,166) | 11,390) | 11,820) | 15,078) | 8,163) | |
| Shareholders’ equity | 1,860) | 2,009) | 1,382) | 1,553) | 1,159) | 2,503) | |
| Solvency Ratio | |||||||
| Debt to equity (including operating lease liability)1 | 6.96 | 5.56 | 8.24 | 7.61 | 13.01 | 3.26 | |
| Benchmarks | |||||||
| Debt to Equity (including Operating Lease Liability), Competitors2 | |||||||
| Costco Wholesale Corp. | 0.42 | 0.42 | 0.53 | 0.65 | — | — | |
| 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: 2024-06-29), 10-K (reporting date: 2023-07-01), 10-K (reporting date: 2022-07-02), 10-K (reporting date: 2021-07-03), 10-K (reporting date: 2020-06-27), 10-K (reporting date: 2019-06-29).
1 2024 Calculation
Debt to equity (including operating lease liability) = Total debt (including operating lease liability) ÷ Shareholders’ equity
= 12,945 ÷ 1,860 = 6.96
2 Click competitor name to see calculations.
An analysis of solvency ratios over the six-year period from 2019 to 2024 reveals significant volatility in the capital structure, characterized by a substantial increase in leverage peaking in 2020 followed by a partial correction.
- Total Debt Trends
- Total debt, including operating lease liabilities, experienced a sharp increase from 8,163 million US$ in 2019 to a peak of 15,078 million US$ in 2020. Following this spike, a period of gradual reduction occurred, with debt reaching a low of 11,166 million US$ in 2023 before rising again to 12,945 million US$ in 2024.
- Shareholders' Equity Fluctuations
- Equity levels demonstrated instability, falling from 2,503 million US$ in 2019 to a minimum of 1,159 million US$ in 2020. Although a recovery was observed, peaking at 2,009 million US$ in 2023, equity decreased to 1,860 million US$ by 2024.
- Debt to Equity Ratio Dynamics
- The debt to equity ratio increased dramatically from 3.26 in 2019 to 13.01 in 2020, driven by the simultaneous rise in total debt and the erosion of shareholders' equity. A corrective trend followed, bringing the ratio down to 5.56 by 2023. However, the ratio rose to 6.96 in 2024, indicating that leverage remains substantially higher than the 2019 baseline.
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Debt to Capital
Sysco Corp., debt to capital calculation, comparison to benchmarks
| Jun 29, 2024 | Jul 1, 2023 | Jul 2, 2022 | Jul 3, 2021 | Jun 27, 2020 | Jun 29, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Current maturities of long-term debt | 469) | 63) | 581) | 495) | 1,544) | 41) | |
| Long-term debt, excluding current maturities | 11,513) | 10,348) | 10,067) | 10,588) | 12,902) | 8,122) | |
| Total debt | 11,982) | 10,411) | 10,648) | 11,083) | 14,447) | 8,163) | |
| Shareholders’ equity | 1,860) | 2,009) | 1,382) | 1,553) | 1,159) | 2,503) | |
| Total capital | 13,842) | 12,419) | 12,030) | 12,636) | 15,605) | 10,666) | |
| Solvency Ratio | |||||||
| Debt to capital1 | 0.87 | 0.84 | 0.89 | 0.88 | 0.93 | 0.77 | |
| Benchmarks | |||||||
| Debt to Capital, Competitors2 | |||||||
| Costco Wholesale Corp. | 0.24 | 0.24 | 0.28 | 0.33 | — | — | |
| 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: 2024-06-29), 10-K (reporting date: 2023-07-01), 10-K (reporting date: 2022-07-02), 10-K (reporting date: 2021-07-03), 10-K (reporting date: 2020-06-27), 10-K (reporting date: 2019-06-29).
1 2024 Calculation
Debt to capital = Total debt ÷ Total capital
= 11,982 ÷ 13,842 = 0.87
2 Click competitor name to see calculations.
The solvency profile exhibits a period of significant leverage expansion followed by a phase of stabilization and a recent moderate increase in debt levels. The capital structure has remained heavily reliant on debt throughout the analyzed period, with the debt to capital ratio consistently remaining above 0.77.
- Debt to Capital Ratio Trends
- A sharp increase in the debt to capital ratio is observed between 2019 and 2020, rising from 0.77 to a peak of 0.93. This indicates a substantial shift toward a more leveraged financial position. Following this peak, the ratio entered a period of relative stabilization, fluctuating between 0.84 and 0.89 from 2021 through 2023. By June 29, 2024, the ratio stood at 0.87, suggesting a sustained high level of debt relative to total capital.
- Total Debt Analysis
- Total debt experienced significant volatility, surging from US$ 8,163 million in 2019 to US$ 14,447 million in 2020. A subsequent deleveraging trend occurred over the next three years, with total debt declining steadily to US$ 10,411 million by 2023. This downward trend reversed in the final year of the period, with total debt increasing to US$ 11,982 million in 2024.
- Total Capital Dynamics
- Total capital movements closely tracked the trajectory of total debt, peaking at US$ 15,605 million in 2020. The close correlation between total debt and total capital suggests that the overall capital base was primarily influenced by borrowing activities. The increase in total capital to US$ 13,842 million in 2024 was driven by the rise in total debt, reinforcing the company's reliance on debt financing to support its capital structure.
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Debt to Capital (including Operating Lease Liability)
Sysco Corp., debt to capital (including operating lease liability) calculation, comparison to benchmarks
| Jun 29, 2024 | Jul 1, 2023 | Jul 2, 2022 | Jul 3, 2021 | Jun 27, 2020 | Jun 29, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Current maturities of long-term debt | 469) | 63) | 581) | 495) | 1,544) | 41) | |
| Long-term debt, excluding current maturities | 11,513) | 10,348) | 10,067) | 10,588) | 12,902) | 8,122) | |
| Total debt | 11,982) | 10,411) | 10,648) | 11,083) | 14,447) | 8,163) | |
| Current operating lease liabilities | 125) | 99) | 106) | 103) | 107) | —) | |
| Long-term operating lease liabilities | 838) | 656) | 636) | 634) | 523) | —) | |
| Total debt (including operating lease liability) | 12,945) | 11,166) | 11,390) | 11,820) | 15,078) | 8,163) | |
| Shareholders’ equity | 1,860) | 2,009) | 1,382) | 1,553) | 1,159) | 2,503) | |
| Total capital (including operating lease liability) | 14,805) | 13,174) | 12,772) | 13,373) | 16,236) | 10,666) | |
| Solvency Ratio | |||||||
| Debt to capital (including operating lease liability)1 | 0.87 | 0.85 | 0.89 | 0.88 | 0.93 | 0.77 | |
| Benchmarks | |||||||
| Debt to Capital (including Operating Lease Liability), Competitors2 | |||||||
| Costco Wholesale Corp. | 0.30 | 0.30 | 0.35 | 0.39 | — | — | |
| 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: 2024-06-29), 10-K (reporting date: 2023-07-01), 10-K (reporting date: 2022-07-02), 10-K (reporting date: 2021-07-03), 10-K (reporting date: 2020-06-27), 10-K (reporting date: 2019-06-29).
1 2024 Calculation
Debt to capital (including operating lease liability) = Total debt (including operating lease liability) ÷ Total capital (including operating lease liability)
= 12,945 ÷ 14,805 = 0.87
2 Click competitor name to see calculations.
An analysis of the solvency metrics reveals a period of significant volatility in leverage followed by a phase of relative stabilization. Total debt and total capital both experienced a sharp increase in June 2020, after which a gradual reduction trend occurred through June 2023. A subsequent uptick in leverage is observed in the most recent fiscal year ending June 2024.
- Total Debt and Capital Trends
- Total debt increased from US$ 8,163 million in 2019 to a peak of US$ 15,078 million in 2020. Following this peak, debt levels decreased steadily to US$ 11,166 million by June 2023, before rising again to US$ 12,945 million in June 2024. Total capital followed a similar trajectory, peaking at US$ 16,236 million in 2020 and concluding the period at US$ 14,805 million in 2024.
- Debt to Capital Ratio Analysis
- The debt to capital ratio rose sharply from 0.77 in 2019 to 0.93 in 2020, marking the highest level of leverage within the analyzed timeframe. Between 2021 and 2024, the ratio stabilized, fluctuating within a narrow range between 0.85 and 0.89. The most recent ratio of 0.87 indicates that debt continues to constitute a substantial proportion of the overall capital structure.
- Solvency Observations
- The maintenance of a ratio above 0.80 since 2020 suggests a persistent reliance on debt financing, including operating lease liabilities. While there was a successful moderation of the 2020 leverage peak, the increase in both absolute debt and the capital ratio in 2024 suggests a renewed expansion of the company's debt obligations relative to its total capital.
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Debt to Assets
Sysco Corp., debt to assets calculation, comparison to benchmarks
| Jun 29, 2024 | Jul 1, 2023 | Jul 2, 2022 | Jul 3, 2021 | Jun 27, 2020 | Jun 29, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Current maturities of long-term debt | 469) | 63) | 581) | 495) | 1,544) | 41) | |
| Long-term debt, excluding current maturities | 11,513) | 10,348) | 10,067) | 10,588) | 12,902) | 8,122) | |
| Total debt | 11,982) | 10,411) | 10,648) | 11,083) | 14,447) | 8,163) | |
| Total assets | 24,917) | 22,821) | 22,086) | 21,414) | 22,628) | 17,967) | |
| Solvency Ratio | |||||||
| Debt to assets1 | 0.48 | 0.46 | 0.48 | 0.52 | 0.64 | 0.45 | |
| Benchmarks | |||||||
| Debt to Assets, Competitors2 | |||||||
| Costco Wholesale Corp. | 0.11 | 0.11 | 0.13 | 0.14 | — | — | |
| 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: 2024-06-29), 10-K (reporting date: 2023-07-01), 10-K (reporting date: 2022-07-02), 10-K (reporting date: 2021-07-03), 10-K (reporting date: 2020-06-27), 10-K (reporting date: 2019-06-29).
1 2024 Calculation
Debt to assets = Total debt ÷ Total assets
= 11,982 ÷ 24,917 = 0.48
2 Click competitor name to see calculations.
The solvency profile over the period from 2019 to 2024 is characterized by a significant spike in leverage in 2020, followed by a multi-year deleveraging phase and a recent slight increase in debt levels.
- Debt to Assets Ratio Trends
- The debt to assets ratio exhibited a sharp increase from 0.45 in 2019 to a peak of 0.64 in 2020. This peak was followed by a consistent downward trend over the next three years, reaching 0.46 by 2023. In 2024, the ratio stabilized slightly higher at 0.48, suggesting that the organization has returned to a leverage level similar to its 2019 baseline.
- Total Debt Fluctuations
- A substantial rise in total debt occurred in 2020, increasing from 8,163 million US dollars to 14,447 million US dollars. Subsequent years saw a steady reduction in total debt, which declined to 10,411 million US dollars by 2023. However, a reversal of this trend is noted in 2024, with total debt rising to 11,982 million US dollars.
- Asset Base Expansion
- Total assets demonstrated a general upward trajectory over the analyzed period. Starting at 17,967 million US dollars in 2019, assets grew to 24,917 million US dollars by 2024. The growth in the asset base has served as a counterbalance to the fluctuations in total debt, preventing the debt to assets ratio from returning to the peak levels observed in 2020.
- Solvency Observation
- The data indicates a period of aggressive borrowing in 2020, which was managed through a systematic reduction of debt and a steady increase in assets between 2021 and 2023. The slight increase in the debt to assets ratio in 2024 reflects a renewed increase in borrowing, although the overall solvency position remains more favorable than it was during the 2020 peak.
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Debt to Assets (including Operating Lease Liability)
Sysco Corp., debt to assets (including operating lease liability) calculation, comparison to benchmarks
| Jun 29, 2024 | Jul 1, 2023 | Jul 2, 2022 | Jul 3, 2021 | Jun 27, 2020 | Jun 29, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Current maturities of long-term debt | 469) | 63) | 581) | 495) | 1,544) | 41) | |
| Long-term debt, excluding current maturities | 11,513) | 10,348) | 10,067) | 10,588) | 12,902) | 8,122) | |
| Total debt | 11,982) | 10,411) | 10,648) | 11,083) | 14,447) | 8,163) | |
| Current operating lease liabilities | 125) | 99) | 106) | 103) | 107) | —) | |
| Long-term operating lease liabilities | 838) | 656) | 636) | 634) | 523) | —) | |
| Total debt (including operating lease liability) | 12,945) | 11,166) | 11,390) | 11,820) | 15,078) | 8,163) | |
| Total assets | 24,917) | 22,821) | 22,086) | 21,414) | 22,628) | 17,967) | |
| Solvency Ratio | |||||||
| Debt to assets (including operating lease liability)1 | 0.52 | 0.49 | 0.52 | 0.55 | 0.67 | 0.45 | |
| Benchmarks | |||||||
| Debt to Assets (including Operating Lease Liability), Competitors2 | |||||||
| Costco Wholesale Corp. | 0.14 | 0.15 | 0.17 | 0.19 | — | — | |
| 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: 2024-06-29), 10-K (reporting date: 2023-07-01), 10-K (reporting date: 2022-07-02), 10-K (reporting date: 2021-07-03), 10-K (reporting date: 2020-06-27), 10-K (reporting date: 2019-06-29).
1 2024 Calculation
Debt to assets (including operating lease liability) = Total debt (including operating lease liability) ÷ Total assets
= 12,945 ÷ 24,917 = 0.52
2 Click competitor name to see calculations.
The solvency profile exhibited significant volatility between 2019 and 2024, characterized by a sharp peak in leverage followed by a sustained period of deleveraging and subsequent stabilization. Total assets demonstrated a consistent long-term growth trajectory, increasing from US$ 17,967 million in 2019 to US$ 24,917 million in 2024.
- Leverage Peak (2020)
- A substantial increase in the debt-to-assets ratio is observed in 2020, rising to 0.67 from 0.45 in the prior year. This spike was primarily driven by a sharp increase in total debt, which climbed from US$ 8,163 million to US$ 15,078 million, marking the highest level of relative indebtedness during the analyzed period.
- Deleveraging Phase (2021-2023)
- Following the 2020 peak, a consistent downward trend in the solvency ratio occurred, declining to 0.55 in 2021, 0.52 in 2022, and reaching 0.49 in 2023. This reduction was achieved through a combination of decreasing total debt, which fell to US$ 11,166 million by 2023, and a gradual expansion of the total asset base.
- Recent Solvency Adjustment (2024)
- The debt-to-assets ratio increased slightly to 0.52 in 2024. This shift coincided with a simultaneous rise in both total assets to US$ 24,917 million and total debt to US$ 12,945 million, suggesting a moderate increase in leverage to support asset growth.
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Financial Leverage
Sysco Corp., financial leverage calculation, comparison to benchmarks
| Jun 29, 2024 | Jul 1, 2023 | Jul 2, 2022 | Jul 3, 2021 | Jun 27, 2020 | Jun 29, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Total assets | 24,917) | 22,821) | 22,086) | 21,414) | 22,628) | 17,967) | |
| Shareholders’ equity | 1,860) | 2,009) | 1,382) | 1,553) | 1,159) | 2,503) | |
| Solvency Ratio | |||||||
| Financial leverage1 | 13.40 | 11.36 | 15.98 | 13.79 | 19.53 | 7.18 | |
| Benchmarks | |||||||
| Financial Leverage, Competitors2 | |||||||
| Costco Wholesale Corp. | 2.96 | 2.75 | 3.11 | 3.37 | — | — | |
| 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: 2024-06-29), 10-K (reporting date: 2023-07-01), 10-K (reporting date: 2022-07-02), 10-K (reporting date: 2021-07-03), 10-K (reporting date: 2020-06-27), 10-K (reporting date: 2019-06-29).
1 2024 Calculation
Financial leverage = Total assets ÷ Shareholders’ equity
= 24,917 ÷ 1,860 = 13.40
2 Click competitor name to see calculations.
An analysis of the solvency position reveals a significant shift in capital structure between June 2019 and June 2024. While total assets have experienced a consistent overall upward trajectory, substantial volatility in shareholders' equity has led to a sustained increase in financial leverage.
- Total Asset Expansion
- Total assets grew from 17,967 million US$ in 2019 to 24,917 million US$ in 2024. A sharp increase was observed between 2019 and 2020, followed by a period of moderate fluctuation and a final acceleration in growth during the 2024 fiscal year.
- Shareholders' Equity Fluctuations
- Equity levels exhibited significant instability over the period. A substantial contraction occurred in 2020, where equity fell to 1,159 million US$ from a 2019 level of 2,503 million US$. Although a recovery trend emerged, peaking at 2,009 million US$ in 2023, the equity base remained below its 2019 baseline, closing at 1,860 million US$ in 2024.
- Financial Leverage Dynamics
- The financial leverage ratio experienced a dramatic spike from 7.18 in 2019 to 19.53 in 2020. Following this peak, the ratio remained elevated compared to 2019 levels, fluctuating between a low of 11.36 in 2023 and a high of 15.98 in 2022. The final recorded ratio of 13.40 in 2024 indicates a continued reliance on debt financing relative to equity to support the expanded asset base.
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Interest Coverage
Sysco Corp., interest coverage calculation, comparison to benchmarks
| Jun 29, 2024 | Jul 1, 2023 | Jul 2, 2022 | Jul 3, 2021 | Jun 27, 2020 | Jun 29, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Net earnings | 1,955) | 1,770) | 1,359) | 524) | 215) | 1,674) | |
| Add: Income tax expense | 610) | 515) | 388) | 61) | 78) | 332) | |
| Add: Interest expense | 607) | 527) | 624) | 880) | 408) | 360) | |
| Earnings before interest and tax (EBIT) | 3,172) | 2,812) | 2,370) | 1,465) | 702) | 2,366) | |
| Solvency Ratio | |||||||
| Interest coverage1 | 5.23 | 5.34 | 3.80 | 1.66 | 1.72 | 6.57 | |
| Benchmarks | |||||||
| Interest Coverage, Competitors2 | |||||||
| Costco Wholesale Corp. | 58.63 | 54.04 | 50.62 | 40.06 | — | — | |
| 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: 2024-06-29), 10-K (reporting date: 2023-07-01), 10-K (reporting date: 2022-07-02), 10-K (reporting date: 2021-07-03), 10-K (reporting date: 2020-06-27), 10-K (reporting date: 2019-06-29).
1 2024 Calculation
Interest coverage = EBIT ÷ Interest expense
= 3,172 ÷ 607 = 5.23
2 Click competitor name to see calculations.
The financial trajectory between June 2019 and June 2024 reflects a period of significant volatility followed by a sustained recovery in solvency margins. A sharp contraction in earnings during 2020 and 2021 severely constrained the capacity to cover interest obligations, although subsequent operational improvements have restored the interest coverage ratio to levels approaching those observed prior to the disruption.
- Earnings Before Interest and Tax (EBIT)
- A substantial decline in EBIT occurred in 2020, falling from 2,366 million USD to 702 million USD. Following this trough, a consistent upward trend is observed, with earnings growing annually to reach a peak of 3,172 million USD by June 2024. This represents a significant expansion of operational profitability over the five-year recovery period.
- Interest Expense
- Interest costs remained relatively stable in 2019 and 2020 but spiked to a peak of 880 million USD in 2021. Expenses subsequently decreased, stabilizing between 527 million USD and 607 million USD from 2022 through 2024, suggesting a potential optimization of debt structures or a reduction in overall borrowing costs following the 2021 peak.
- Interest Coverage Ratio
- The interest coverage ratio experienced a precipitous drop from 6.57 in 2019 to a low of 1.66 in 2021, indicating a period of heightened financial risk where operating income narrowly exceeded interest obligations. However, the ratio rebounded strongly to 3.80 in 2022 and further stabilized above 5.00 in 2023 and 2024, signaling a return to a robust solvency position and an improved margin of safety for debt servicing.
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Fixed Charge Coverage
Sysco Corp., fixed charge coverage calculation, comparison to benchmarks
| Jun 29, 2024 | Jul 1, 2023 | Jul 2, 2022 | Jul 3, 2021 | Jun 27, 2020 | Jun 29, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Net earnings | 1,955) | 1,770) | 1,359) | 524) | 215) | 1,674) | |
| Add: Income tax expense | 610) | 515) | 388) | 61) | 78) | 332) | |
| Add: Interest expense | 607) | 527) | 624) | 880) | 408) | 360) | |
| Earnings before interest and tax (EBIT) | 3,172) | 2,812) | 2,370) | 1,465) | 702) | 2,366) | |
| Add: Operating lease cost | 154) | 139) | 127) | 132) | 123) | 206) | |
| Earnings before fixed charges and tax | 3,326) | 2,952) | 2,497) | 1,596) | 825) | 2,572) | |
| Interest expense | 607) | 527) | 624) | 880) | 408) | 360) | |
| Operating lease cost | 154) | 139) | 127) | 132) | 123) | 206) | |
| Fixed charges | 761) | 666) | 750) | 1,012) | 531) | 566) | |
| Solvency Ratio | |||||||
| Fixed charge coverage1 | 4.37 | 4.43 | 3.33 | 1.58 | 1.55 | 4.54 | |
| Benchmarks | |||||||
| Fixed Charge Coverage, Competitors2 | |||||||
| Costco Wholesale Corp. | 22.50 | 19.10 | 18.23 | 15.30 | — | — | |
| 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: 2024-06-29), 10-K (reporting date: 2023-07-01), 10-K (reporting date: 2022-07-02), 10-K (reporting date: 2021-07-03), 10-K (reporting date: 2020-06-27), 10-K (reporting date: 2019-06-29).
1 2024 Calculation
Fixed charge coverage = Earnings before fixed charges and tax ÷ Fixed charges
= 3,326 ÷ 761 = 4.37
2 Click competitor name to see calculations.
The financial solvency profile exhibits a significant V-shaped recovery between 2019 and 2024. A period of acute financial pressure occurred in 2020 and 2021, characterized by a sharp decline in earnings and a temporary increase in fixed obligations, which severely compressed the margin of safety for meeting fixed charges. However, subsequent years demonstrate a robust restoration of earnings capacity and a stabilization of the coverage ratio to levels consistent with the 2019 baseline.
- Earnings Before Fixed Charges and Tax
- A substantial contraction was observed in 2020, where earnings dropped from US$ 2,572 million to US$ 825 million. Following this trough, a consistent upward trajectory was maintained over the next four years. Earnings climbed to US$ 1,596 million in 2021, US$ 2,497 million in 2022, and reached a peak of US$ 3,326 million by June 29, 2024, representing a significant expansion in the company's ability to generate funds for fixed obligations.
- Fixed Charges
- Fixed charges remained relatively stable between 2019 and 2020 but experienced a sharp spike in 2021, reaching a period high of US$ 1,012 million. This increase coincided with the period of lowest earnings, compounding the pressure on solvency. From 2022 onward, fixed charges trended downward to US$ 666 million in 2023, before a slight increase to US$ 761 million in 2024.
- Fixed Charge Coverage Ratio
- The coverage ratio plummeted from 4.54 in 2019 to 1.55 in 2020, remaining nearly flat at 1.58 in 2021. This indicates a period of heightened financial risk where the margin for error was minimal. A rapid recovery followed, with the ratio rising to 3.33 in 2022 and reaching 4.43 in 2023. As of June 29, 2024, the ratio stands at 4.37, signaling a return to a strong and stable solvency position.
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