Altair Engineering Inc (ALTR)

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	225,929	305,604	—	188,300	—
Total stockholders’ equity	US$ in thousands	711,331	569,736	613,197	378,586	354,707
Debt-to-capital ratio		0.24	0.35	0.00	0.33	0.00

December 31, 2023 calculation

Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $225,929K ÷ ($225,929K + $711,331K)
= 0.24

Altair Engineering Inc's debt-to-capital ratio has shown fluctuations over the past five years. In 2023, the ratio stands at 0.24, indicating that 24% of the company's capital structure is financed by debt. This represents a decrease from the previous year, where the ratio was 0.35.

The significant drop in the debt-to-capital ratio from 2022 to 2023 suggests that Altair Engineering Inc may have reduced its reliance on debt as a source of financing relative to its total capital. This could be viewed positively by investors and creditors as it potentially indicates a stronger financial position and lower financial risk.

In 2021 and 2019, the company reported a debt-to-capital ratio of 0.00, which may imply that Altair Engineering Inc had no debt obligations during those years or that debt formed an insignificant part of its capital structure.

Overall, the trend in Altair Engineering Inc's debt-to-capital ratio indicates a potentially prudent capital structure management strategy, with a recent decrease in leverage levels compared to the previous year. Further analysis would be necessary to understand the specific reasons behind these changes and to assess the implications for the company's financial health and risk profile.