Ashland Global Holdings Inc (ASH)
Debt-to-equity 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-equity ratio | 0.42 | 0.39 | 0.58 | 0.52 | 0.42 |
September 30, 2023 calculation
Debt-to-equity ratio = Long-term debt ÷ Total stockholders’ equity
= $1,314,000K ÷ $3,097,000K
= 0.42
The debt-to-equity ratio measures a company's financial leverage by comparing its total liabilities to shareholders' equity. A higher ratio indicates higher financial risk, as it suggests a greater reliance on debt financing.
In the case of Ashland Inc, the debt-to-equity ratio has fluctuated over the past five years, ranging from 0.39 to 0.72. The ratio decreased from 0.72 in 2021 to 0.43 in 2023, indicating a reduction in financial leverage and a relatively stronger equity position compared to the previous year. This improvement suggests a more balanced capital structure and a potentially lower level of financial risk.
It is important to note that while a lower debt-to-equity ratio generally indicates a more conservative financial approach, it is essential to consider industry standards and the company's specific circumstances when evaluating the significance of this ratio. Additionally, a thorough analysis of other financial metrics and factors would provide a more comprehensive understanding of Ashland Inc's financial health and risk profile.
Peer comparison
Sep 30, 2023