Avantor Inc (AVTR)
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 | 3,234,700 | 5,276,700 | 5,923,300 | 6,978,000 | 4,867,500 |
| Total stockholders’ equity | US$ in thousands | 5,956,700 | 5,252,600 | 4,855,400 | 4,197,000 | 2,674,300 |
| Debt-to-capital ratio | 0.35 | 0.50 | 0.55 | 0.62 | 0.65 |
December 31, 2024 calculation
Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $3,234,700K ÷ ($3,234,700K + $5,956,700K)
= 0.35
The debt-to-capital ratio for Avantor Inc has shown a declining trend over the past five years. As of December 31, 2020, the ratio was 0.65, indicating that 65% of the company's capital structure was funded by debt. However, by December 31, 2024, the ratio decreased to 0.35, signaling that only 35% of the company's capital was debt-financed.
This trend suggests that Avantor Inc has been gradually reducing its reliance on debt to fund its operations and investments. A declining debt-to-capital ratio is generally viewed positively by investors and creditors as it indicates a healthier financial position and lower financial risk for the company.
Overall, the decreasing debt-to-capital ratio of Avantor Inc from 2020 to 2024 reflects a prudent financial management strategy that has effectively lowered the company's debt burden relative to its capital base.
Peer comparison
Dec 31, 2024