Allegion PLC (ALLE)
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 | 1,602,400 | 2,081,900 | 1,429,500 | 1,429,400 | 1,427,600 |
| Total stockholders’ equity | US$ in thousands | 1,318,300 | 941,800 | 759,100 | 829,400 | 757,400 |
| Debt-to-equity ratio | 1.22 | 2.21 | 1.88 | 1.72 | 1.88 |
December 31, 2023 calculation
Debt-to-equity ratio = Long-term debt ÷ Total stockholders’ equity
= $1,602,400K ÷ $1,318,300K
= 1.22
The debt-to-equity ratio of Allegion plc has been fluctuating over the past five years. In 2023, the ratio decreased to 1.53 from 2.22 in 2022, indicating a reduction in the company's reliance on debt financing compared to equity. This could signify a stronger financial position and lower financial risk for the company in the most recent year.
The ratio had previously peaked in 2022 at 2.22, showing a higher proportion of debt relative to equity. This could suggest that Allegion plc had increased its debt levels or reduced equity during that period, which might have raised concerns about the company's financial leverage and ability to meet debt obligations.
In the years prior to 2022, the debt-to-equity ratio ranged from 1.72 to 1.89, suggesting a moderate level of debt compared to equity. These ratios indicate a relatively stable financial structure for the company during those years.
It is essential for Allegion plc to carefully manage its debt levels to maintain a healthy balance between debt and equity financing. The decreasing trend in the debt-to-equity ratio in 2023 could be a positive sign of improved financial health, but ongoing monitoring and prudent financial management will be crucial for sustaining this favorable position in the future.