Ashland Global Holdings Inc (ASH)
Debt-to-capital ratio
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|
| Long-term debt | US$ in thousands | 1,314,000 | 1,270,000 | 1,596,000 | 1,573,000 | 1,501,000 |
| Total stockholders’ equity | US$ in thousands | 3,097,000 | 3,220,000 | 2,752,000 | 3,036,000 | 3,571,000 |
| Debt-to-capital ratio | 0.30 | 0.28 | 0.37 | 0.34 | 0.30 |
September 30, 2023 calculation
Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $1,314,000K ÷ ($1,314,000K + $3,097,000K)
= 0.30
The debt-to-capital ratio is a measure of a company's financial leverage, indicating the proportion of a company's capital that is contributed by debt. Ashland Inc's debt-to-capital ratios for the five most recent fiscal years are as follows:
- Sep 30, 2023: 0.30
- Sep 30, 2022: 0.28
- Sep 30, 2021: 0.42
- Sep 30, 2020: 0.38
- Sep 30, 2019: 0.32
The trend in Ashland Inc's debt-to-capital ratio indicates the company's changing reliance on debt to fund its operations and investments. A decreasing ratio suggests a lower proportion of debt used in the company's capital structure, while an increasing ratio implies a higher reliance on debt.
From 2019 to 2020, there was a notable increase in the debt-to-capital ratio from 0.32 to 0.38, indicating a higher proportion of debt in the capital structure. This increase could stem from various factors such as additional borrowing for expansion, acquisitions, or other capital-intensive activities.
However, the ratio decreased in 2022 to 0.28, suggesting a reduction in the proportion of debt used in the capital structure. This decline could signify efforts to pay down debt, better financial management, or a shift towards equity financing.
In 2023, the debt-to-capital ratio increased to 0.30, indicating a slight rise in the company's reliance on debt to finance its operations. While the increase is moderate, it suggests that Ashland Inc may have taken on additional debt compared to the previous year.
Overall, the trend in Ashland Inc's debt-to-capital ratio warrants further investigation into the company's capital structure, financial policies, and potential impacts on its financial stability and risk profile. Additionally, a comparison with industry peers and analysis in conjunction with other financial ratios would provide a more comprehensive understanding of the company's leverage position.
Peer comparison
Sep 30, 2023