Smith AO Corporation (AOS)
Debt-to-assets ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Long-term debt | US$ in thousands | 117,300 | 334,500 | 189,900 | 106,400 | 277,200 |
| Total assets | US$ in thousands | 3,213,900 | 3,332,300 | 3,474,400 | 3,160,700 | 3,058,000 |
| Debt-to-assets ratio | 0.04 | 0.10 | 0.05 | 0.03 | 0.09 |
December 31, 2023 calculation
Debt-to-assets ratio = Long-term debt ÷ Total assets
= $117,300K ÷ $3,213,900K
= 0.04
The debt-to-assets ratio measures the proportion of a company's total assets that are financed by debt. A lower ratio indicates less reliance on debt financing and potentially lower financial risk. A.O. Smith Corp. has exhibited fluctuations in its debt-to-assets ratio over the past five years.
In 2023, the company's debt-to-assets ratio decreased to 0.04, which indicates that only 4% of its total assets are funded by debt. This suggests a conservative financial strategy with a lower level of leverage compared to the previous year.
In 2022, the ratio was higher at 0.10, implying that 10% of its assets were debt-financed. The decrease in 2023 could be seen as a positive sign of reducing reliance on debt for financing its operations.
In 2021, the ratio was 0.06, slightly higher than in 2023 but lower compared to 2022, indicating a moderate level of debt used to support the company's assets.
The ratio was the same in 2020 as in 2023, standing at 0.04, suggesting a consistent low debt-to-assets ratio maintained by A.O. Smith Corp.
In 2019, the ratio increased to 0.09, indicating a higher level of debt utilized to finance assets compared to the recent years.
Overall, A.O. Smith Corp. has shown fluctuations in its debt-to-assets ratio over the past five years, with a notable reduction in 2023 suggesting a shift towards lower reliance on debt for asset financing and potentially lower financial risk.
Peer comparison
Dec 31, 2023