Smith AO Corporation (AOS)
Debt-to-capital ratio
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Long-term debt | US$ in thousands | 183,200 | 117,300 | 334,500 | 189,900 | 106,400 |
| Total stockholders’ equity | US$ in thousands | 1,883,500 | 1,844,400 | 1,747,700 | 1,832,200 | 1,848,300 |
| Debt-to-capital ratio | 0.09 | 0.06 | 0.16 | 0.09 | 0.05 |
December 31, 2024 calculation
Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $183,200K ÷ ($183,200K + $1,883,500K)
= 0.09
The debt-to-capital ratio of Smith AO Corporation has shown some fluctuations over the past five years. As of December 31, 2020, the ratio was relatively low at 0.05, indicating that only 5% of the company's capital structure was comprised of debt.
However, the ratio increased significantly to 0.09 by the end of December 31, 2021, suggesting a higher proportion of debt in the capital mix. This trend continued as the ratio further rose to 0.16 by December 31, 2022, signaling a significant increase in the company's reliance on debt financing.
Subsequently, there was a notable drop in the debt-to-capital ratio to 0.06 by December 31, 2023, indicating a reduction in the proportion of debt relative to the company's total capital. By December 31, 2024, the ratio had slightly increased to 0.09, showing a return to a similar level as in 2021.
Overall, the fluctuations in Smith AO Corporation's debt-to-capital ratio suggest varying levels of leveraging within the company's capital structure over the years, potentially impacting its financial risk and stability. Further analysis of the reasons behind these fluctuations and their implications for the company's financial health would be necessary.
Peer comparison
Dec 31, 2024