ABM Industries Incorporated (ABM)
Debt-to-assets ratio
| Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | ||
|---|---|---|---|---|---|---|
| Long-term debt | US$ in thousands | 1,279,800 | 1,086,300 | 852,800 | 603,000 | 744,200 |
| Total assets | US$ in thousands | 4,933,700 | 4,868,900 | 4,436,200 | 3,776,900 | 3,692,600 |
| Debt-to-assets ratio | 0.26 | 0.22 | 0.19 | 0.16 | 0.20 |
October 31, 2023 calculation
Debt-to-assets ratio = Long-term debt ÷ Total assets
= $1,279,800K ÷ $4,933,700K
= 0.26
The debt-to-assets ratio is a key financial ratio that measures the proportion of a company's assets that are financed by debt. A higher ratio implies that more of the company's assets are financed by debt, which can indicate higher financial risk and lower financial flexibility. Conversely, a lower ratio suggests a lower level of financial risk and greater financial stability.
Using the data provided, we can see that the debt-to-assets ratio for ABM Industries Inc. has fluctuated over the past five years:
- In 2023, the debt-to-assets ratio increased to 0.27 from 0.26 in 2022.
- In 2022, the ratio also showed an increase from 0.20 in 2021.
- In 2021, there was a notable increase from 0.19 in 2020.
- In 2020, the ratio also showed an increase from 0.22 in 2019.
The increasing trend in the debt-to-assets ratio over the past five years suggests that ABM Industries Inc. has been progressively relying more on debt to finance its assets. This trend could indicate a higher level of financial risk, as the company's assets are increasingly leveraged with debt. It's important to note that while a moderate increase in the ratio over time may not necessarily be alarming, a continuous upward trend could raise concerns about the company's ability to manage its debt levels effectively.
Overall, the trend in ABM Industries Inc.'s debt-to-assets ratio indicates a potential shift in its capital structure towards a higher reliance on debt financing. This may raise questions about the company's ability to service its debt and manage financial risks effectively in the long term. As such, stakeholders and investors should closely monitor the company's debt management and financial leverage strategies to assess its overall financial health and sustainability.
Peer comparison
Oct 31, 2023