An operating lease is treated like a rental contract. Neither the leased asset nor the associated liability is reported on the lessee balance sheet, but the rights may be very similar to the rights of an owner. The lessee only records the lease payments as a rental expense in income statement.

Adjustments to Financial Statements for Operating Leases
Adjusted Financial Ratios for Operating Leases (Summary)
Adjusted Total Asset Turnover
Adjusted Debt to Equity
Adjusted Return on Assets (ROA)

Williams-Sonoma Inc., adjustments to financial statements

US$ in thousands

	Jan 28, 2024	Jan 29, 2023	Jan 30, 2022	Jan 31, 2021	Feb 2, 2020	Feb 3, 2019
Adjustment to Total Assets
Total assets (as reported)	5,273,548)	4,663,016)	4,625,620)	4,661,424)	4,054,042)	2,812,844)
Add: Operating lease right-of-use asset (before adoption of FASB Topic 842)¹	—)	—)	—)	—)	—)	1,484,531)
Total assets (adjusted)	5,273,548)	4,663,016)	4,625,620)	4,661,424)	4,054,042)	4,297,375)
Adjustment to Total Debt
Total debt (as reported)	—)	—)	—)	299,350)	299,818)	299,620)
Add: Operating lease liability (before adoption of FASB Topic 842)²	—)	—)	—)	—)	—)	1,484,531)
Add: Current operating lease liabilities	234,517)	231,965)	217,409)	209,754)	227,923)	—)
Add: Long-term operating lease liabilities	1,156,104)	1,211,693)	1,066,839)	1,025,057)	1,094,579)	—)
Total debt (adjusted)	1,390,621)	1,443,658)	1,284,248)	1,534,161)	1,622,320)	1,784,151)

Based on: 10-K (reporting date: 2024-01-28), 10-K (reporting date: 2023-01-29), 10-K (reporting date: 2022-01-30), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-02-02), 10-K (reporting date: 2019-02-03).

^{1, 2} Equal to total present value of future operating lease payments.

Williams-Sonoma Inc., Financial Data: Reported vs. Adjusted

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Williams-Sonoma Inc., adjusted financial ratios

	Jan 28, 2024	Jan 29, 2023	Jan 30, 2022	Jan 31, 2021	Feb 2, 2020	Feb 3, 2019
Total Asset Turnover¹
Reported total asset turnover	1.47	1.86	1.78	1.46	1.45	2.02
Adjusted total asset turnover	1.47	1.86	1.78	1.46	1.45	1.32
Debt to Equity²
Reported debt to equity	0.00	0.00	0.00	0.18	0.24	0.26
Adjusted debt to equity	0.65	0.85	0.77	0.93	1.31	1.54
Return on Assets³ (ROA)
Reported ROA	18.01%	24.19%	24.35%	14.60%	8.78%	11.86%
Adjusted ROA	18.01%	24.19%	24.35%	14.60%	8.78%	7.76%

Based on: 10-K (reporting date: 2024-01-28), 10-K (reporting date: 2023-01-29), 10-K (reporting date: 2022-01-30), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-02-02), 10-K (reporting date: 2019-02-03).

¹ See details »

² See details »

³ See details »

Financial ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Williams-Sonoma Inc. adjusted total asset turnover ratio improved from 2022 to 2023 but then deteriorated significantly from 2023 to 2024.
Adjusted debt to equity	A solvency ratio calculated as adjusted total debt divided by total shareholders’ equity.	Williams-Sonoma Inc. adjusted debt to equity ratio deteriorated from 2022 to 2023 but then improved from 2023 to 2024 exceeding 2022 level.
Adjusted ROA	A profitability ratio calculated as net income divided by adjusted total assets.	Williams-Sonoma Inc. adjusted ROA deteriorated from 2022 to 2023 and from 2023 to 2024.

Williams-Sonoma Inc., Financial Ratios: Reported vs. Adjusted

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	Jan 28, 2024	Jan 29, 2023	Jan 30, 2022	Jan 31, 2021	Feb 2, 2020	Feb 3, 2019
As Reported
Selected Financial Data (US$ in thousands)
Net revenues	7,750,652)	8,674,417)	8,245,936)	6,783,189)	5,898,008)	5,671,593)
Total assets	5,273,548)	4,663,016)	4,625,620)	4,661,424)	4,054,042)	2,812,844)
Activity Ratio
Total asset turnover¹	1.47	1.86	1.78	1.46	1.45	2.02
Adjusted for Operating Leases
Selected Financial Data (US$ in thousands)
Net revenues	7,750,652)	8,674,417)	8,245,936)	6,783,189)	5,898,008)	5,671,593)
Adjusted total assets	5,273,548)	4,663,016)	4,625,620)	4,661,424)	4,054,042)	4,297,375)
Activity Ratio
Adjusted total asset turnover²	1.47	1.86	1.78	1.46	1.45	1.32

Based on: 10-K (reporting date: 2024-01-28), 10-K (reporting date: 2023-01-29), 10-K (reporting date: 2022-01-30), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-02-02), 10-K (reporting date: 2019-02-03).

2024 Calculations

¹ Total asset turnover = Net revenues ÷ Total assets
= 7,750,652 ÷ 5,273,548 = 1.47

² Adjusted total asset turnover = Net revenues ÷ Adjusted total assets
= 7,750,652 ÷ 5,273,548 = 1.47

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Activity ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Williams-Sonoma Inc. adjusted total asset turnover ratio improved from 2022 to 2023 but then deteriorated significantly from 2023 to 2024.

	Jan 28, 2024	Jan 29, 2023	Jan 30, 2022	Jan 31, 2021	Feb 2, 2020	Feb 3, 2019
As Reported
Selected Financial Data (US$ in thousands)
Total debt	—)	—)	—)	299,350)	299,818)	299,620)
Stockholders’ equity	2,127,861)	1,701,051)	1,664,207)	1,651,185)	1,235,860)	1,155,714)
Solvency Ratio
Debt to equity¹	0.00	0.00	0.00	0.18	0.24	0.26
Adjusted for Operating Leases
Selected Financial Data (US$ in thousands)
Adjusted total debt	1,390,621)	1,443,658)	1,284,248)	1,534,161)	1,622,320)	1,784,151)
Stockholders’ equity	2,127,861)	1,701,051)	1,664,207)	1,651,185)	1,235,860)	1,155,714)
Solvency Ratio
Adjusted debt to equity²	0.65	0.85	0.77	0.93	1.31	1.54

Based on: 10-K (reporting date: 2024-01-28), 10-K (reporting date: 2023-01-29), 10-K (reporting date: 2022-01-30), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-02-02), 10-K (reporting date: 2019-02-03).

2024 Calculations

¹ Debt to equity = Total debt ÷ Stockholders’ equity
= 0 ÷ 2,127,861 = 0.00

² Adjusted debt to equity = Adjusted total debt ÷ Stockholders’ equity
= 1,390,621 ÷ 2,127,861 = 0.65

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Solvency ratio	Description	The company
Adjusted debt-to-equity	A solvency ratio calculated as adjusted total debt divided by total shareholders’ equity.	Williams-Sonoma Inc. adjusted debt-to-equity ratio deteriorated from 2022 to 2023 but then improved from 2023 to 2024 exceeding 2022 level.

	Jan 28, 2024	Jan 29, 2023	Jan 30, 2022	Jan 31, 2021	Feb 2, 2020	Feb 3, 2019
As Reported
Selected Financial Data (US$ in thousands)
Net earnings	949,762)	1,127,904)	1,126,337)	680,714)	356,062)	333,684)
Total assets	5,273,548)	4,663,016)	4,625,620)	4,661,424)	4,054,042)	2,812,844)
Profitability Ratio
ROA¹	18.01%	24.19%	24.35%	14.60%	8.78%	11.86%
Adjusted for Operating Leases
Selected Financial Data (US$ in thousands)
Net earnings	949,762)	1,127,904)	1,126,337)	680,714)	356,062)	333,684)
Adjusted total assets	5,273,548)	4,663,016)	4,625,620)	4,661,424)	4,054,042)	4,297,375)
Profitability Ratio
Adjusted ROA²	18.01%	24.19%	24.35%	14.60%	8.78%	7.76%

Based on: 10-K (reporting date: 2024-01-28), 10-K (reporting date: 2023-01-29), 10-K (reporting date: 2022-01-30), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-02-02), 10-K (reporting date: 2019-02-03).

2024 Calculations

¹ ROA = 100 × Net earnings ÷ Total assets
= 100 × 949,762 ÷ 5,273,548 = 18.01%

² Adjusted ROA = 100 × Net earnings ÷ Adjusted total assets
= 100 × 949,762 ÷ 5,273,548 = 18.01%

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Profitability ratio	Description	The company
Adjusted ROA	A profitability ratio calculated as net income divided by adjusted total assets.	Williams-Sonoma Inc. adjusted ROA deteriorated from 2022 to 2023 and from 2023 to 2024.

Williams-Sonoma Inc. (NYSE:WSM)

Analysis of Operating Leases

Adjustments to Financial Statements for Operating Leases

Williams-Sonoma Inc., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios for Operating Leases (Summary)

Williams-Sonoma Inc., Financial Ratios: Reported vs. Adjusted

Adjusted Total Asset Turnover

Adjusted Debt to Equity

Adjusted Return on Assets (ROA)