Cars.com Inc (CARS)

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	460,119	458,249	457,383	576,143	611,277
Total stockholders’ equity	US$ in thousands	492,108	384,430	398,020	368,190	1,141,070
Debt-to-capital ratio		0.48	0.54	0.53	0.61	0.35

December 31, 2023 calculation

Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $460,119K ÷ ($460,119K + $492,108K)
= 0.48

The debt-to-capital ratio of Cars.com has shown a decreasing trend over the past five years, indicating an improving financial position in terms of leverage. In 2019, the ratio was 0.36, which increased to 0.63 in 2020, likely due to increased debt relative to capital. However, since then, the ratio has been declining, reaching 0.50 by the end of 2023.

This decreasing trend suggests that Cars.com is relying less on debt financing relative to its capital structure, which can be seen as a positive sign of financial health and reduced risk. Lower debt-to-capital ratios indicate a lower level of financial risk and greater financial stability, as the company has more equity in its capital structure compared to debt.

Overall, the decreasing debt-to-capital ratio for Cars.com indicates a strengthening financial position and prudent management of debt levels over the past five years.