Armstrong World Industries Inc (AWI)
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 | 564,300 | 651,100 | 606,400 | 690,500 | 604,500 |
| Total stockholders’ equity | US$ in thousands | 591,800 | 535,000 | 519,700 | 450,900 | 364,900 |
| Debt-to-capital ratio | 0.49 | 0.55 | 0.54 | 0.60 | 0.62 |
December 31, 2023 calculation
Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $564,300K ÷ ($564,300K + $591,800K)
= 0.49
The debt-to-capital ratio of Armstrong World Industries Inc. has shown a favorable trend over the past five years. The ratio decreased from 0.63 in 2019 to 0.51 in 2023. This indicates that the company has been effectively managing its debt relative to its total capital base. A lower debt-to-capital ratio suggests that the company relies less on debt financing and has a stronger equity position. This could be viewed positively by investors and creditors as it signifies a lower financial risk and potentially greater stability for the company. It is worth noting that the company's debt-to-capital ratio has been declining steadily, reflecting potential improvements in its financial structure and risk management.
Peer comparison
Dec 31, 2023