AAR Corp (AIR)
Debt-to-capital ratio
| May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | May 31, 2020 | ||
|---|---|---|---|---|---|---|
| Long-term debt | US$ in thousands | 985,400 | 269,700 | 98,900 | 133,700 | 600,000 |
| Total stockholders’ equity | US$ in thousands | 1,189,800 | 1,099,100 | 1,034,500 | 974,400 | 902,600 |
| Debt-to-capital ratio | 0.45 | 0.20 | 0.09 | 0.12 | 0.40 |
May 31, 2024 calculation
Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $985,400K ÷ ($985,400K + $1,189,800K)
= 0.45
The debt-to-capital ratio for AAR Corp has fluctuated over the past five years. In 2024, the ratio stands at 0.45, indicating that 45% of the company's capital is financed through debt. This represents a significant increase from the previous year, where the ratio was at 0.20.
Comparing to earlier years, the debt-to-capital ratio was relatively low in 2022 at 0.09 and in 2021 at 0.12, signifying a conservative debt funding approach. However, in 2020, the ratio was notably higher at 0.40, suggesting a higher reliance on debt for capital structure.
Overall, the increasing trend in the debt-to-capital ratio from 2021 to 2024 may indicate a shift towards a more debt-heavy capital structure, potentially to fund expansion, acquisitions, or other strategic initiatives. It is important for stakeholders to closely monitor this ratio to assess the company's leverage and financial risk profile.
Peer comparison
May 31, 2024