Allete Inc (ALE)

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	1,679,900	1,648,200	1,763,200	1,593,200	1,400,900
Total stockholders’ equity	US$ in thousands	2,809,600	2,691,900	2,404,300	2,294,600	2,231,900
Debt-to-capital ratio		0.37	0.38	0.42	0.41	0.39

December 31, 2023 calculation

Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $1,679,900K ÷ ($1,679,900K + $2,809,600K)
= 0.37

The debt-to-capital ratio of Allete, Inc. has shown a decreasing trend over the past five years. The ratio decreased from 0.42 in 2019 to 0.39 in 2023. This indicates that the company relied less on debt to finance its operations and investments relative to its total capital structure.

A lower debt-to-capital ratio suggests that Allete, Inc. has a stronger equity position and may be less susceptible to financial risk associated with excessive debt. It also implies that the company has a healthier balance sheet and may have better financial stability.

However, it's important to note that while a decreasing trend in the debt-to-capital ratio can be positive, it is also essential to evaluate the specific reasons behind the change. Factors such as changes in the company's capital structure, borrowing decisions, profitability, and overall financial strategy should be considered when assessing the implications of the debt-to-capital ratio for Allete, Inc.