Key financial ratios include: Debt to Equity, Times Interest Earned, Accounts Receivable Turnover, Average Collection Period, Gross Profit Margin, Net Profit Margin, ROA, ROE, and EPS.
Debt to equity: For AutoZone, looking that this ratio at first glance is quite shocking. Between 2014-2016 D-to-E ranged between -5.62 and -5.81.
Based on those numbers, banks would want to look at AutoZone's TImes Interest Earned Ratio. Surprisingly, AutoZone over 2014-2016 had healthy ratios from 10.93 to 13.95.
Accounts Receivable Turnover indicates how effectively AutoZone is issuing out credit to customers and collecting on its receivables. Recent numbers indicate that numbers have been steadily dropping from 47.2 to 41.1 to 37 times per year.
Average Collection Period in the amount of time AutoZone is able to collect on those receivables previously mentioned. As expected, the days have been increasing each year from 7.7, to 8.9, to 9.9 in 2016.
Gross Profit Margin shows what kind of profit AutoZone is making after factoring in its initial costs. AutoZone has held a consistent 52%-52.7% margin over 3 years.
Net Profit Margin show what profits are after all the costs and expenses are taken out. Holding steady 11.29%, 11.39%, and 11.67% AutoZone is able to consistently keep costs under control with a slight increase in profit each year.
Return on Assets (ROA) demonstrates how efficient AutoZone is at using its assets to generate income. Given the industry average (3.29% in 2016), AutoZone's 14.3%, 14.3%, and 14.4% over 3 years has proved to be quite impressive.
Return on Equity (ROE) similar to ROA except with showing efficiency with equity. Given that equity was deficient over the last 3 years, numbers of -66%, -68.1% and -69.4% do not bode well for AutoZone with the industry average being 9.57%.
Earnings Per Share (EPS) Calculates the amount of net earnings in comparison to AutoZone's outstanding shares. Each year increasing handsomely with $32.16, to $36.76, to $41.52.