Armstrong World Industries Inc (AWI)
Debt-to-equity ratio
| Dec 31, 2024 | Sep 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Long-term debt | US$ in thousands | 502,600 | 533,100 | 558,900 | 564,300 | 604,800 | 640,200 | 660,600 | 651,100 | 658,300 | 644,300 | 615,300 | 606,400 | 602,400 | 653,400 | 684,400 | 690,500 | 656,500 | 607,500 | 678,500 | 604,500 |
| Total stockholders’ equity | US$ in thousands | 757,100 | 717,000 | 626,800 | 591,800 | 585,500 | 566,700 | 544,800 | 535,000 | 521,200 | 527,800 | 537,600 | 519,700 | 522,200 | 498,300 | 473,600 | 450,900 | 442,600 | 402,900 | 370,400 | 364,900 |
| Debt-to-equity ratio | 0.66 | 0.74 | 0.89 | 0.95 | 1.03 | 1.13 | 1.21 | 1.22 | 1.26 | 1.22 | 1.14 | 1.17 | 1.15 | 1.31 | 1.45 | 1.53 | 1.48 | 1.51 | 1.83 | 1.66 |
December 31, 2024 calculation
Debt-to-equity ratio = Long-term debt ÷ Total stockholders’ equity
= $502,600K ÷ $757,100K
= 0.66
The debt-to-equity ratio of Armstrong World Industries Inc has shown a declining trend over the past few years, indicating a reduction in the company's reliance on debt compared to its equity. The ratio decreased from 1.66 as of December 31, 2019, to 0.66 as of December 31, 2024. This downward trend suggests that the company has been effectively managing its debt levels relative to its equity, which can be viewed positively by investors and creditors.
The decreasing debt-to-equity ratio can imply that the company has been paying off its debt obligations, improving its financial stability and reducing financial risk. A lower ratio generally indicates less financial leverage and a stronger balance sheet. It could also signify that the company has been able to generate higher profits and cash flows to fund its operations and growth without relying heavily on external financing.
However, it is important to note that a very low debt-to-equity ratio may also indicate underutilization of debt for potentially favorable expansion opportunities. Therefore, while a declining ratio is generally positive, it is essential for the company to strike a balance between debt and equity to optimize its capital structure and overall financial health.
Peer comparison
Dec 31, 2024