Balchem Corporation (BCPC)
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 | 326,146 | 440,569 | 122,281 | 174,086 | 256,396 |
| Total stockholders’ equity | US$ in thousands | 1,053,980 | 938,284 | 877,015 | 828,233 | 743,667 |
| Debt-to-capital ratio | 0.24 | 0.32 | 0.12 | 0.17 | 0.26 |
December 31, 2023 calculation
Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $326,146K ÷ ($326,146K + $1,053,980K)
= 0.24
Balchem Corp.'s debt-to-capital ratio has fluctuated over the past five years, ranging from 0.11 to 0.32. The ratio indicates the proportion of debt within the company's capital structure, with lower ratios suggesting a lower reliance on debt financing. In 2021, the ratio was at its lowest point of 0.11, implying that only 11% of the company's capital was financed through debt. This may have been viewed positively by investors and creditors as it signifies a lower financial risk.
However, there was a notable increase in the ratio in 2022 to 0.32, which suggests a higher level of debt relative to capital. This increase may indicate increased borrowing for potential expansion or investment opportunities. It is essential to closely monitor the trend and reasons behind such fluctuations to assess the company's financial health and risk management practices.
In 2023, Balchem Corp. managed to reduce its debt-to-capital ratio to 0.23, indicating a more favorable balance between debt and equity. The company appears to have made efforts to optimize its capital structure, potentially to improve its financial flexibility and reduce interest expenses. Overall, while fluctuations in the debt-to-capital ratio can indicate changes in the company's financial strategy, it is crucial to assess the context and reasons behind these changes to make informed evaluations about Balchem Corp.'s financial position.
Peer comparison
Dec 31, 2023