Altair Engineering Inc (ALTR)
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 | 225,929 | 305,604 | — | 188,300 | — |
| Total stockholders’ equity | US$ in thousands | 711,331 | 569,736 | 613,197 | 378,586 | 354,707 |
| Debt-to-equity ratio | 0.32 | 0.54 | 0.00 | 0.50 | 0.00 |
December 31, 2023 calculation
Debt-to-equity ratio = Long-term debt ÷ Total stockholders’ equity
= $225,929K ÷ $711,331K
= 0.32
Altair Engineering Inc's debt-to-equity ratio has demonstrated fluctuations over the past five years. In 2023, the ratio stands at 0.32, indicating that the company has $0.32 of debt for every $1 of equity. This represents a decrease from the previous year's ratio of 0.54, suggesting a positive trend towards lower reliance on debt financing.
The significant change from 2021, where the ratio was 0.00, highlights a shift in the company's capital structure, potentially reducing financial risk and enhancing financial stability. However, it is essential to note that a debt-to-equity ratio of 0.00 may also be associated with a lack of debt, which could limit the company's financial flexibility.
Comparing the 2023 ratio to 2020 and 2019, where the ratios were 0.50 and 0.00 respectively, Altair Engineering Inc's current debt-to-equity position reflects a moderate level of debt usage relative to equity levels. This may indicate a balanced approach to funding growth and operations through a mix of debt and equity sources.
Overall, the decreasing trend in the debt-to-equity ratio over the past years suggests that Altair Engineering Inc has been managing its debt levels effectively and moving towards a more conservative financial structure. Investors and stakeholders may view this as a positive sign of prudent financial management and reduced leverage risk.
Peer comparison
Dec 31, 2023