Archer-Daniels-Midland Company (ADM)
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 | 8,259,000 | 7,735,000 | 8,011,000 | 7,885,000 | 7,672,000 |
| Total stockholders’ equity | US$ in thousands | 21,432,000 | 22,584,000 | 22,177,000 | 20,000,000 | 13,808,000 |
| Debt-to-capital ratio | 0.28 | 0.26 | 0.27 | 0.28 | 0.36 |
December 31, 2023 calculation
Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $8,259,000K ÷ ($8,259,000K + $21,432,000K)
= 0.28
Archer-Daniels-Midland Company's debt-to-capital ratio has been relatively stable over the past five years, ranging from 0.26 to 0.36. The ratio indicates the proportion of the company's capital structure that is funded by debt. A lower ratio suggests lower financial risk and greater stability for the company as it indicates a smaller reliance on debt financing.
In the case of Archer-Daniels-Midland, the decreasing trend from 0.36 in 2019 to 0.26 in 2022 suggests a reduction in debt relative to total capital employed, potentially indicating improved financial health and a stronger equity position. However, the ratio increased slightly to 0.28 in 2023, indicating a moderate shift back towards debt relative to capital.
Overall, the company's debt-to-capital ratio has indicated a conservative approach to debt financing over the years, with the recent slight increase suggesting a potential shift in capital structure strategy. Further analysis of the company's overall financial health and performance would provide a more comprehensive understanding of the implications of these changes.
Peer comparison
Dec 31, 2023