Asbury Automotive Group Inc (ABG)

Debt-to-capital ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Long-term debt	US$ in thousands	—	2,960,900	3,502,000	1,253,900	983,700
Total stockholders’ equity	US$ in thousands	3,244,100	2,903,500	2,115,500	905,500	646,300
Debt-to-capital ratio		0.00	0.50	0.62	0.58	0.60

December 31, 2023 calculation

Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $—K ÷ ($—K + $3,244,100K)
= 0.00

The debt-to-capital ratio of Asbury Automotive Group Inc has fluctuated over the past five years, ranging from a low of 0.54 in 2022 to a high of 0.74 in 2019. The ratio indicates the proportion of the company's capital that is financed through debt. In general, a higher debt-to-capital ratio suggests a higher level of financial risk as the company relies more heavily on debt to fund its operations and investments. Conversely, a lower ratio implies a lower risk as the company is less reliant on debt financing.

The decreasing trend from 2019 to 2022 demonstrates a positive sign as the company reduced its reliance on debt to fund its operations during this period. However, the slight increase in 2023 to 0.62 suggests a potential shift in the capital structure towards more debt financing. It is important for stakeholders to monitor this ratio to ensure that the company maintains a balanced capital structure that aligns with its financial objectives and risk tolerance.