ABM Industries Incorporated (ABM)
Debt-to-equity 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 stockholders’ equity | US$ in thousands | 1,799,900 | 1,717,200 | 1,609,200 | 1,500,300 | 1,542,000 |
| Debt-to-equity ratio | 0.71 | 0.63 | 0.53 | 0.40 | 0.48 |
October 31, 2023 calculation
Debt-to-equity ratio = Long-term debt ÷ Total stockholders’ equity
= $1,279,800K ÷ $1,799,900K
= 0.71
The debt-to-equity ratio is a key financial ratio that provides insight into a company's capital structure and its ability to meet its long-term financial obligations. The trend of this ratio over the past five years for ABM Industries Inc. is as follows:
- Oct 31, 2023: 0.73
- Oct 31, 2022: 0.74
- Oct 31, 2021: 0.55
- Oct 31, 2020: 0.48
- Oct 31, 2019: 0.52
The debt-to-equity ratio reflects the proportion of a company's financing that is contributed by creditors (debt) versus shareholders (equity). A higher ratio indicates a higher level of debt relative to equity, suggesting potential financial risk, while a lower ratio may indicate a conservative capital structure.
ABM Industries Inc.'s debt-to-equity ratio has shown an increasing trend from 0.48 in 2020 to 0.73 in 2023. This rising trend suggests that the company has been increasing its reliance on debt financing compared to equity. While this may indicate a more aggressive capital structure, it also implies increased financial leverage and potential risk, as higher debt levels can lead to higher interest expenses and financial vulnerability in economic downturns.
It is important to compare this trend with industry benchmarks and the company's overall financial performance. Additionally, understanding the reasons behind the changes in the debt-to-equity ratio, such as acquisitions, new financing decisions, or changes in shareholder equity, would provide further insight into ABM Industries Inc.'s financial position and strategies.
Peer comparison
Oct 31, 2023