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.