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)
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).
- Leverage Ratios
- Debt to equity experienced significant volatility over the analyzed periods. It spiked dramatically from 3.26 in mid-2019 to a peak of 12.47 in mid-2020, then declined steadily to 5.18 by mid-2023 before rising slightly to 6.44 in mid-2024. Including operating lease liabilities, the trend mirrors this pattern with marginally higher values, peaking at 13.01 in 2020 and settling to 6.96 in 2024.
- Debt to capital remained consistently high, hovering close to or above 0.8 throughout all years. It peaked at 0.93 in 2020 and showed a moderate decline before rising slightly again in 2024. The inclusion of operating lease liabilities had a negligible effect on this ratio, indicating lease obligations contributed little additional leverage relative to total capital.
- Debt to assets displayed an increase from 0.45 in 2019 to 0.64 in 2020, signaling greater reliance on debt financing during that period. Subsequently, this ratio decreased gradually, reaching 0.46 in 2023, before a minor uptick to 0.48 in 2024. Considering operating lease liabilities, the ratio maintains the same general trend but at higher levels, reflecting the impact of lease obligations on total asset financing.
- Financial leverage followed the same volatile profile as debt to equity. Beginning at 7.18 in mid-2019, it soared to 19.53 in 2020, indicating substantially increased overall obligations relative to equity, before falling back to lower but still elevated levels around 13.4 by 2024.
- Coverage Ratios
- Interest coverage ratios sharply declined from a comfortable 6.57 in 2019 to approximately 1.7 in both 2020 and 2021, suggesting a significant squeeze on the ability to service interest expenses during the pandemic period. Afterward, there was a strong recovery, with coverage improving to over 5 by 2023 and 2024, indicating enhanced earnings or reduced interest burden.
- Fixed charge coverage ratios mirror this pattern, dropping from 4.54 in 2019 to lows around 1.55-1.58 during 2020-2021, reflecting constrained capacity to cover fixed financing costs. Improvement is seen thereafter, reaching around 4.4 in 2023 and 2024, suggesting a stronger operational position.
Debt Ratios
Coverage Ratios
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 | 0.45 | 0.48 | |
| Target Corp. | 1.19 | 1.44 | 1.07 | 0.88 | 0.97 | — | |
| Walmart Inc. | 0.56 | 0.58 | 0.51 | 0.60 | 0.73 | — | |
| Debt to Equity, Sector | |||||||
| Consumer Staples Distribution & Retail | 0.58 | 0.61 | 0.55 | 0.62 | 0.71 | — | |
| Debt to Equity, Industry | |||||||
| Consumer Staples | 1.11 | 1.16 | 1.08 | 1.07 | 1.24 | — | |
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.
- Total Debt
- The total debt amount displayed a notable increase from 8,163 million USD in mid-2019 to a peak of 14,447 million USD in mid-2020. This was followed by a decline and relative stabilization between 10,083 million USD and 11,982 million USD from 2021 through mid-2024. Despite some fluctuations, the debt level in 2024 remains significantly higher than the 2019 figure, indicating an overall elevated leverage position over the period.
- Shareholders’ Equity
- Shareholders’ equity showed a substantial decline from 2,503 million USD in 2019 to 1,159 million USD in 2020, reflecting a sharp reduction in net asset value during this period. Subsequently, equity rebounded partially with some volatility, ranging between approximately 1,382 million USD and 2,009 million USD from 2021 onward. The equity figure of 1,860 million USD in 2024 indicates recovery but remains below the initial 2019 level, suggesting challenges in equity growth or retention of earnings.
- Debt to Equity Ratio
- The debt to equity ratio exhibited significant volatility, rising dramatically from 3.26 in 2019 to 12.47 in 2020, which aligns with the simultaneous increase in total debt and the reduction in equity. The ratio moderated in subsequent years but remained elevated compared to the 2019 level, fluctuating between 5.18 and 7.7 from 2021 through 2024. The ratio of 6.44 in 2024 suggests that the company continues to carry a higher debt load relative to its equity base compared to the pre-2020 period, highlighting increased financial leverage and potential risk.
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 | 0.61 | 0.48 | |
| Target Corp. | 1.46 | 1.70 | 1.28 | 1.05 | 1.18 | — | |
| Walmart Inc. | 0.73 | 0.77 | 0.69 | 0.78 | 0.97 | — | |
| Debt to Equity (including Operating Lease Liability), Sector | |||||||
| Consumer Staples Distribution & Retail | 0.75 | 0.78 | 0.73 | 0.79 | 0.93 | — | |
| Debt to Equity (including Operating Lease Liability), Industry | |||||||
| Consumer Staples | 1.23 | 1.28 | 1.20 | 1.19 | 1.39 | — | |
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.
The financial data reveals notable movements in the company's capital structure over the analyzed periods.
- Total debt (including operating lease liability)
- The total debt exhibited a significant increase from 8,163 million USD in mid-2019 to a peak of 15,078 million USD in mid-2020. Following this peak, there was a downward trend, with debt levels decreasing to approximately 11,166 million USD by mid-2023. However, the debt level rose again to 12,945 million USD by mid-2024, indicating renewed borrowing or increased lease liabilities.
- Shareholders’ equity
- Shareholders’ equity experienced a sharp decline between mid-2019 and mid-2020, dropping from 2,503 million USD to 1,159 million USD. Thereafter, equity gradually recovered over the subsequent years, rising to 2,009 million USD by mid-2023 before slightly decreasing to 1,860 million USD in mid-2024. This pattern suggests fluctuations in retained earnings or other comprehensive income components, with some recovery following a significant downturn.
- Debt to equity (including operating lease liability)
- The debt to equity ratio rose sharply from 3.26 in mid-2019 to a high of 13.01 in mid-2020, reflecting the combined effect of increased debt and reduced equity. After this peak, the ratio progressively declined, reaching 5.56 in mid-2023, which indicates an improvement in the balance between debt and equity financing. Nonetheless, the ratio increased again to 6.96 by mid-2024, signifying a relative rise in leverage.
Overall, the data suggest a period of heightened financial leverage and reduced equity base around 2020, followed by partial recovery in subsequent years. The pattern points to strategic adjustments in the capital structure, with careful management to moderate leverage levels after their initial escalation. The recent uptick in both debt and leverage ratio warrants attention to future debt management and equity strengthening measures.
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 | 0.31 | 0.32 | |
| Target Corp. | 0.54 | 0.59 | 0.52 | 0.47 | 0.49 | — | |
| Walmart Inc. | 0.36 | 0.37 | 0.34 | 0.38 | 0.42 | — | |
| Debt to Capital, Sector | |||||||
| Consumer Staples Distribution & Retail | 0.37 | 0.38 | 0.36 | 0.38 | 0.41 | — | |
| Debt to Capital, Industry | |||||||
| Consumer Staples | 0.53 | 0.54 | 0.52 | 0.52 | 0.55 | — | |
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 financial data reveals the following trends and insights in the analyzed periods:
- Total Debt
- There was a significant increase in total debt from 2019 to 2020, rising from $8,163 million to $14,447 million. In the subsequent years, total debt trended downward until 2023, reaching $10,411 million, before climbing again to $11,982 million in 2024. This indicates fluctuation in debt levels, with a peak during the year ending in 2020 followed by a partial reduction and then a moderate increase.
- Total Capital
- Total capital followed a somewhat similar pattern, increasing markedly from $10,666 million in 2019 to $15,605 million in 2020. After this peak, there was a decline to $12,636 million in 2021 and further decreases until 2022. Subsequently, total capital exhibited a modest recovery in 2023 and 2024, reaching $13,842 million in the latest period. This pattern suggests variability in the company's capital structure, with notable contractions after 2020 and a mild upward trend thereafter.
- Debt to Capital Ratio
- The debt to capital ratio increased sharply from 0.77 in 2019 to 0.93 in 2020, reflecting the substantial rise in debt relative to total capital. It declined moderately in 2021 to 0.88 and remained relatively stable through 2022 at 0.89, followed by a further decrease to 0.84 in 2023. In 2024, the ratio climbed again to 0.87. Overall, this ratio indicates a high leverage position throughout the periods, with some fluctuations corresponding to changes in debt and capital levels.
Debt to Capital (including Operating Lease Liability)
Sysco Corp., debt to capital (including operating lease liability) calculation, comparison to benchmarks
| Jun 29, 2024 | Jul 1, 2023 | Jul 2, 2022 | Jul 3, 2021 | Jun 27, 2020 | Jun 29, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ 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 | 0.38 | 0.32 | |
| Target Corp. | 0.59 | 0.63 | 0.56 | 0.51 | 0.54 | — | |
| Walmart Inc. | 0.42 | 0.43 | 0.41 | 0.44 | 0.49 | — | |
| Debt to Capital (including Operating Lease Liability), Sector | |||||||
| Consumer Staples Distribution & Retail | 0.43 | 0.44 | 0.42 | 0.44 | 0.48 | — | |
| Debt to Capital (including Operating Lease Liability), Industry | |||||||
| Consumer Staples | 0.55 | 0.56 | 0.54 | 0.54 | 0.58 | — | |
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.
The analysis of the presented financial data reveals several key trends related to the company's debt, capital structure, and leverage over the six-year period ending in 2024.
- Total Debt (including operating lease liability)
- The total debt level experienced a significant increase from 8,163 million USD in 2019 to a peak of 15,078 million USD in 2020. Following this peak, there was a general decline in debt through 2023, reaching 11,166 million USD. However, debt rose again in 2024 to 12,945 million USD. This pattern suggests a period of elevated borrowing coinciding with 2020, possibly reflecting external factors or strategic financing decisions, followed by a partial deleveraging phase, and then a renewed increase in debt obligations.
- Total Capital (including operating lease liability)
- Total capital also rose sharply from 10,666 million USD in 2019 to 16,236 million USD in 2020, then decreased steadily over the next three years to 13,174 million USD in 2023, before increasing again to 14,805 million USD by mid-2024. The capital trends reflect movements similar to total debt, indicating that increases and decreases in capital were largely influenced by changes in liabilities and possibly equity components over the years.
- Debt to Capital Ratio (including operating lease liability)
- The leverage ratio showed a marked increase from 0.77 in 2019 to 0.93 in 2020, indicating a substantial rise in the proportion of total debt relative to total capital. Subsequently, the ratio declined gradually to 0.85 by 2023, demonstrating a decrease in leverage and better capital structure balance. In 2024, the ratio increased slightly to 0.87, suggesting a moderate uptick in leverage but remaining below the peak observed in 2020. Overall, the company's leverage remained relatively high throughout the period, with the highest leverage coinciding with the 2020 financial year.
In summary, the financial data indicates that the company underwent a period of increased borrowing and capital expansion in 2020, likely driven by specific strategic or market conditions. Following this period, there was a trend toward reduced leverage and capital contraction until 2023, after which both debt and capital increased again by 2024. The debt-to-capital ratio trends reflect these fluctuations, peaking in 2020 and then stabilizing with moderate leverage thereafter.
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 | 0.15 | 0.16 | |
| Target Corp. | 0.29 | 0.30 | 0.25 | 0.25 | 0.27 | — | |
| Walmart Inc. | 0.19 | 0.18 | 0.17 | 0.19 | 0.23 | — | |
| Debt to Assets, Sector | |||||||
| Consumer Staples Distribution & Retail | 0.19 | 0.19 | 0.18 | 0.19 | 0.22 | — | |
| Debt to Assets, Industry | |||||||
| Consumer Staples | 0.31 | 0.31 | 0.30 | 0.30 | 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 = Total debt ÷ Total assets
= 11,982 ÷ 24,917 = 0.48
2 Click competitor name to see calculations.
- Total debt
-
The total debt experienced a significant increase from 8,163 million US dollars in June 2019 to 14,447 million US dollars in June 2020. After this peak, there was a notable decrease over the next three years, reaching 10,411 million US dollars in July 2023. However, in the most recent period ending June 2024, total debt rose again to 11,982 million US dollars, indicating renewed borrowing or issuance of debt.
- Total assets
-
Total assets show a consistent upward trend throughout the entire period under review. The value increased from 17,967 million US dollars in June 2019 to 24,917 million US dollars by June 2024. This steady growth suggests ongoing acquisitions, investments, or asset revaluations, contributing to the expansion of the asset base.
- Debt to assets ratio
-
The debt to assets ratio peaked at 0.64 in June 2020, coinciding with the highest total debt level recorded. Following that, the ratio decreased steadily to 0.46 by July 2023, aligning with the reduction in total debt amid growing assets. In the most recent period, the ratio increased slightly to 0.48, reflecting the recent uptick in total debt relative to total assets. Overall, the ratio indicates a moderate level of leverage, with some fluctuations corresponding to changes in liability and asset levels.
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 | 0.20 | 0.16 | |
| Target Corp. | 0.35 | 0.36 | 0.31 | 0.29 | 0.33 | — | |
| Walmart Inc. | 0.24 | 0.24 | 0.23 | 0.25 | 0.31 | — | |
| Debt to Assets (including Operating Lease Liability), Sector | |||||||
| Consumer Staples Distribution & Retail | 0.24 | 0.24 | 0.23 | 0.25 | 0.29 | — | |
| Debt to Assets (including Operating Lease Liability), Industry | |||||||
| Consumer Staples | 0.34 | 0.34 | 0.33 | 0.33 | 0.37 | — | |
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 financial data reveals notable fluctuations and trends across the assessed periods, particularly in total debt, total assets, and the debt to assets ratio.
- Total Debt (including operating lease liability)
- The total debt demonstrates considerable variability. From June 2019 to June 2020, there was a marked increase, rising from 8,163 million to 15,078 million US dollars, an increase of approximately 84.6%. Following this spike, the debt decreased over the subsequent two years, declining to 11,166 million by July 2023. However, in the most recent period ending June 2024, total debt rose again to 12,945 million. This pattern suggests periods of aggressive debt accumulation followed by partial deleveraging, then another increase.
- Total Assets
- The total assets have generally exhibited a growing trend over the analyzed timeframe. Starting at 17,967 million US dollars in June 2019, assets rose steadily with a slight dip in the 2021 period but recovered to reach 24,917 million US dollars by June 2024. The overall growth from 2019 to 2024 is approximately 38.7%, indicating ongoing expansion in asset base and potential capital investment or asset acquisition.
- Debt to Assets Ratio (including operating lease liability)
- The debt to assets ratio experienced notable shifts. It climbed sharply from 0.45 in 2019 to a peak of 0.67 in 2020, reflecting the substantial increase in debt relative to assets during that period. Thereafter, the ratio declined steadily, reaching 0.49 in 2023, indicating improved balance sheet leverage in that interval. However, it inched upward again to 0.52 in 2024, paralleling the recent rise in total debt. Despite fluctuations, the ratio remains below the peak level observed in 2020, suggesting a relatively more conservative leverage position compared to that peak.
Overall, the data indicate a period of aggressive borrowing around 2020, likely in response to external conditions, followed by a phase of deleveraging, and a renewed increase in debt commitments by 2024. Concurrently, asset growth has been steady, supporting the company’s expanded operational scale. The debt to assets ratio reflects these dynamics, balancing leverage and asset growth over the years analyzed.
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 | 3.04 | 2.98 | |
| Target Corp. | 4.12 | 4.75 | 4.20 | 3.55 | 3.62 | — | |
| Walmart Inc. | 3.01 | 3.17 | 2.94 | 3.12 | 3.17 | — | |
| Financial Leverage, Sector | |||||||
| Consumer Staples Distribution & Retail | 3.12 | 3.24 | 3.11 | 3.21 | 3.20 | — | |
| Financial Leverage, Industry | |||||||
| Consumer Staples | 3.62 | 3.71 | 3.59 | 3.59 | 3.76 | — | |
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.
- Total assets
- There is an overall upward trend in total assets over the analyzed periods. The value increased from 17,967 million US dollars in mid-2019 to 24,917 million US dollars in mid-2024, reflecting sustained asset growth. Notably, there was a significant jump from 17,967 million to 22,628 million between 2019 and 2020, followed by some fluctuations but maintaining a general upward trajectory thereafter.
- Shareholders’ equity
- Shareholders’ equity demonstrated volatility across the time frame. Starting at 2,503 million US dollars in 2019, it declined sharply to 1,159 million in 2020. Subsequent periods saw partial recoveries, peaking at 2,009 million in 2023, before declining again to 1,860 million in 2024. Despite fluctuations, the end figure remains below the initial 2019 level, indicating inconsistent equity growth during the period.
- Financial leverage
- Financial leverage exhibited considerable variation from 2019 through 2024. The ratio started at 7.18 in 2019, escalating steeply to 19.53 in 2020, suggesting a sharp increase in indebtedness relative to equity that year. It then declined to 13.79 in 2021, increased slightly in 2022 to 15.98, before gradually reducing to 11.36 in 2023 and rising marginally again to 13.4 in 2024. These fluctuations indicate periods of changing reliance on debt financing relative to equity, with leverage remaining elevated compared to 2019.
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 | 34.54 | 32.77 | |
| Target Corp. | 11.55 | 8.15 | 22.16 | 6.68 | 9.78 | — | |
| Walmart Inc. | 9.14 | 9.00 | 10.38 | 9.88 | 8.74 | — | |
| Interest Coverage, Sector | |||||||
| Consumer Staples Distribution & Retail | 12.00 | 11.46 | 14.77 | 10.47 | 10.17 | — | |
| Interest Coverage, Industry | |||||||
| Consumer Staples | 10.92 | 11.37 | 15.69 | 11.46 | 11.62 | — | |
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 data over the six-year period reveals notable fluctuations and trends in earnings before interest and tax (EBIT), interest expense, and interest coverage ratio.
- Earnings before interest and tax (EBIT)
- EBIT showed a significant decrease from 2,366 million USD in 2019 to 702 million USD in 2020, indicating a sharp decline in operating profitability. Subsequently, EBIT rebounded strongly over the following years, reaching 1,465 million USD in 2021 and continuing to rise steadily to 3,172 million USD by 2024. This trend suggests a recovery and growth in operating performance after the dip observed in 2020.
- Interest Expense
- Interest expense increased markedly from 360 million USD in 2019 to a peak of 880 million USD in 2021. After this peak, it declined to 624 million USD in 2022 and remained somewhat stable around 527 to 607 million USD in 2023 and 2024 respectively. The initial rise could indicate increased borrowing or higher interest rates, while the subsequent reduction suggests improved management of interest-bearing liabilities or refinancing effects.
- Interest Coverage Ratio
- This ratio, measuring the company's ability to cover interest expenses with EBIT, reflected the sharp decline in operating earnings and increased interest burden in 2020 and 2021, falling to lows of 1.72 and 1.66 respectively. It then improved substantially to 3.8 in 2022, and further increased to above 5 in 2023 and 2024, returning to a healthier level by the end of the period. This improvement indicates enhanced capacity to meet interest obligations from operating earnings, coinciding with EBIT growth and reduced interest expense.
Overall, the data portrays a period of financial stress around 2020 and 2021, with weakened earnings and elevated interest costs. However, the subsequent years demonstrate a positive trajectory of recovery in operating income, better control or reduction in interest expenses, and strengthened interest coverage, suggesting improved financial stability and operational efficiency.
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 | 14.03 | 12.40 | |
| Target Corp. | 6.04 | 4.62 | 12.02 | 5.24 | 6.48 | — | |
| Walmart Inc. | 5.40 | 4.84 | 5.38 | 5.16 | 4.82 | — | |
| Fixed Charge Coverage, Sector | |||||||
| Consumer Staples Distribution & Retail | 6.71 | 5.95 | 7.41 | 5.88 | 5.60 | — | |
| Fixed Charge Coverage, Industry | |||||||
| Consumer Staples | 7.34 | 7.38 | 9.06 | 7.46 | 7.19 | — | |
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
Fixed charge coverage = Earnings before fixed charges and tax ÷ Fixed charges
= 3,326 ÷ 761 = 4.37
2 Click competitor name to see calculations.
The analysis of the financial data over the six-year period reveals significant fluctuations in earnings before fixed charges and tax, fixed charges, and the corresponding fixed charge coverage ratio.
- Earnings Before Fixed Charges and Tax
- The earnings demonstrate considerable volatility. Beginning at 2,572 million US dollars in mid-2019, there is a sharp decline to 825 million in 2020, indicating a substantial reduction, possibly due to external factors impacting income. The figure recovers gradually over the subsequent years, reaching 3,326 million by mid-2024, surpassing the initial 2019 level. This trend reflects a recovery trajectory with increasing earnings after a pronounced downturn.
- Fixed Charges
- Fixed charges exhibit less variability in magnitude compared to earnings but still show notable changes. Starting at 566 million in 2019, fixed charges slightly decrease to 531 million in 2020, then rise sharply to 1,012 million in 2021. Subsequently, fixed charges decrease again to 666 million in 2023, before a slight increase to 761 million in 2024. This pattern indicates some volatility in the fixed expenditure commitments of the company over the period assessed.
- Fixed Charge Coverage Ratio
- The coverage ratio, which measures the ability to cover fixed charges with earnings, reflects the combined effect of changes in earnings and fixed charges. It starts at a strong 4.54 in 2019, drops significantly to 1.55 in 2020 where coverage is minimal, and remains low at 1.58 in 2021. Thereafter, the ratio improves markedly to 4.37 by 2024, indicating an enhanced ability to cover fixed charges by earnings. The trend demonstrates a recovery from a period of constrained earnings relative to fixed obligations towards a more stable and healthier coverage position.
Overall, the financial data convey a period of significant stress around 2020 and 2021, followed by a robust recovery. The company's earnings rebounded strongly while fixed charges showed fluctuations but remained moderate in comparison to earnings. The fixed charge coverage ratio's return to above four times coverage by 2024 suggests improved financial stability and operational performance in recent years.