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.
Peer comparison
Dec 31, 2023