Alpha and Omega Semiconductor Ltd (AOSL)

Debt-to-equity ratio

		Jun 30, 2024	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020
Long-term debt	US$ in thousands	26,724	38,360	42,486	77,990	99,775
Total stockholders’ equity	US$ in thousands	891,607	883,919	854,093	373,205	293,689
Debt-to-equity ratio		0.03	0.04	0.05	0.21	0.34

June 30, 2024 calculation

Debt-to-equity ratio = Long-term debt ÷ Total stockholders’ equity
= $26,724K ÷ $891,607K
= 0.03

The debt-to-equity ratio of Alpha and Omega Semiconductor Ltd has decreased steadily over the past five years, indicating a decreasing reliance on debt to finance its operations. In 2020, the ratio was relatively high at 0.34, but it has since been declining each year to reach 0.03 in 2024. This trend suggests that the company has been effectively managing its debt levels and increasing its equity portion in its capital structure. A lower debt-to-equity ratio indicates a stronger financial position and lower financial risk for the company, as it implies lower leverage and potential interest rate risk. Overall, the decreasing trend in the debt-to-equity ratio reflects a positive financial strategy by Alpha and Omega Semiconductor Ltd.