Archer-Daniels-Midland Company (ADM)
Debt-to-equity 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-equity ratio | 0.39 | 0.34 | 0.36 | 0.39 | 0.56 |
December 31, 2023 calculation
Debt-to-equity ratio = Long-term debt ÷ Total stockholders’ equity
= $8,259,000K ÷ $21,432,000K
= 0.39
The debt-to-equity ratio for Archer-Daniels-Midland Company has exhibited a declining trend over the past five years, indicating a gradual decrease in the company's reliance on debt financing relative to equity.
The ratio decreased from 0.56 in 2019 to 0.39 in 2023, suggesting a more conservative capital structure and improved financial health. A lower debt-to-equity ratio typically signifies lower financial risk as it implies less debt burden and a higher proportion of equity in the company's capital structure.
The decreasing trend in the debt-to-equity ratio reflects a strategic shift towards a more balanced mix of debt and equity financing, potentially driven by efforts to reduce interest costs, enhance liquidity, and strengthen the company's overall financial position.
Overall, the decreasing debt-to-equity ratio for Archer-Daniels-Midland Company indicates a positive trend towards a healthier capital structure and improved financial stability.
Peer comparison
Dec 31, 2023