Agilent Technologies Inc (A)
Debt-to-capital ratio
| Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | ||
|---|---|---|---|---|---|---|
| Long-term debt | US$ in thousands | — | — | 2,729,000 | 2,284,000 | 1,791,000 |
| Total stockholders’ equity | US$ in thousands | 5,845,000 | 5,305,000 | 5,389,000 | 4,873,000 | 4,748,000 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.34 | 0.32 | 0.27 |
October 31, 2023 calculation
Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $—K ÷ ($—K + $5,845,000K)
= 0.00
The debt-to-capital ratio is a key financial ratio that measures a company's financial leverage by comparing its total debt to its total capital, which includes both debt and equity. A lower ratio indicates a lower dependence on debt for financing, while a higher ratio implies higher leverage and potential financial risk.
Based on the provided data for Agilent Technologies Inc., the debt-to-capital ratio has fluctuated slightly over the past five years. In 2023, the ratio stands at 0.32, down from 0.34 in 2022 and 0.34 in 2021. This decrease suggests that Agilent has reduced its reliance on debt for financing as a proportion of its total capital compared to the previous year. However, it is important to note that the ratio remains relatively consistent, indicating a stable capital structure over the period.
The trend of the debt-to-capital ratio over the past five years suggests that Agilent has maintained a moderate level of financial leverage, with a reasonable balance between debt and equity in its capital structure. This stability in the ratio indicates that the company has managed its debt and capital effectively, avoiding significant fluctuations in its leverage.
The reduction in the debt-to-capital ratio in 2023 may signal a conservative approach to financing and a potential focus on deleveraging, which could enhance the company's financial position and reduce its financial risk. This trend could also indicate a strategic shift towards a more equity-oriented capital structure, which may be seen as a positive sign by investors and creditors.
In conclusion, the gradual decline in Agilent's debt-to-capital ratio over the past year reflects a well-managed and relatively conservative capital structure. It suggests that the company has been maintaining a prudent balance between debt and equity, and the recent decrease may indicate a strategic effort to reduce leverage and enhance financial stability. However, further analysis of other financial metrics and industry benchmarks would be necessary to fully evaluate the company's financial health and leverage position.
Peer comparison
Oct 31, 2023