Smith AO Corporation (AOS)
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 | 117,300 | 334,500 | 189,900 | 106,400 | 277,200 |
| Total stockholders’ equity | US$ in thousands | 1,844,400 | 1,747,700 | 1,832,200 | 1,848,300 | 1,666,800 |
| Debt-to-capital ratio | 0.06 | 0.16 | 0.09 | 0.05 | 0.14 |
December 31, 2023 calculation
Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $117,300K ÷ ($117,300K + $1,844,400K)
= 0.06
The debt-to-capital ratio of A.O. Smith Corp. has varied over the years based on the data provided. In 2023, the ratio significantly decreased to 0.06 from 0.16 in 2022, indicating a lower reliance on debt financing in relation to total capital. This could signal improved financial health and lower financial risk for the company. The ratio was also relatively low in 2020 and 2019 at 0.06 and 0.15 respectively.
In 2021, there was a slight increase in the debt-to-capital ratio to 0.10, which may suggest a higher proportion of debt in the company's capital structure compared to the previous year. It is important for investors and stakeholders to monitor such changes in debt-to-capital ratios as they could impact the company's solvency and financial stability.
Overall, the trend in A.O. Smith Corp.'s debt-to-capital ratio indicates some level of volatility, with fluctuations observed in different years. It is essential for investors to consider the company's ability to manage its debt levels effectively while maintaining a healthy balance between debt and equity financing.
Peer comparison
Dec 31, 2023