Advance Auto Parts Inc (AAP)
Debt-to-equity ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Long-term debt | US$ in thousands | 1,786,360 | 1,188,280 | 1,034,320 | 1,032,980 | 747,320 |
| Total stockholders’ equity | US$ in thousands | 2,519,730 | 2,599,190 | 3,129,450 | 3,559,510 | 3,549,080 |
| Debt-to-equity ratio | 0.71 | 0.46 | 0.33 | 0.29 | 0.21 |
December 31, 2023 calculation
Debt-to-equity ratio = Long-term debt ÷ Total stockholders’ equity
= $1,786,360K ÷ $2,519,730K
= 0.71
The debt-to-equity ratio of Advance Auto Parts Inc has been increasing steadily over the past five years, indicating a greater reliance on debt financing relative to equity.
From December 31, 2019, to December 31, 2023, the ratio has risen from 0.21 to 0.71, suggesting a significant increase in the company's debt levels compared to its equity. This upward trend may raise concerns about the company's financial leverage and ability to service its debt obligations.
The rising debt-to-equity ratio could signal increased financial risk for Advance Auto Parts Inc, as higher levels of debt may result in higher interest payments and lower flexibility in managing financial challenges. It is important for investors and stakeholders to closely monitor the company's debt levels and financial health to assess its ability to sustain its current capital structure and meet its financial obligations.
Peer comparison
Dec 31, 2023