Arrow Electronics Inc (ARW)
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 | 2,153,550 | 3,182,960 | 2,244,440 | 2,097,940 | 2,640,130 |
| Total stockholders’ equity | US$ in thousands | 5,805,460 | 5,546,360 | 5,282,300 | 5,089,320 | 4,811,920 |
| Debt-to-capital ratio | 0.27 | 0.36 | 0.30 | 0.29 | 0.35 |
December 31, 2023 calculation
Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $2,153,550K ÷ ($2,153,550K + $5,805,460K)
= 0.27
The debt-to-capital ratio of Arrow Electronics Inc. has shown some variability over the past five years. The ratio stood at 0.33 as of December 31, 2021, indicating that 33% of the company's capital structure was financed by debt. This was followed by an increase in the ratio to 0.40 in both 2022 and 2023. Despite the slight fluctuation, the company has maintained a relatively stable debt-to-capital ratio within the range of 0.31 to 0.40 over the period under consideration.
A debt-to-capital ratio of 0.40 in 2023 implies that 40% of Arrow Electronics' capital is funded by debt. This indicates that the company relies significantly on debt financing in its capital structure. A higher ratio suggests a greater proportion of debt relative to equity, which can indicate increased financial risk due to debt obligations.
Overall, Arrow Electronics Inc.'s debt-to-capital ratio has remained at a moderate level, suggesting a balanced mix of debt and equity funding in its capital structure. It is important for investors and stakeholders to monitor this ratio to assess the company's leverage and financial risk profile.
Peer comparison
Dec 31, 2023