Cadence Design Systems Inc (CDNS)

Debt-to-assets ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Long-term debt	US$ in thousands	299,771	648,078	347,588	346,793	346,019
Total assets	US$ in thousands	5,669,490	5,137,070	4,386,300	3,950,780	3,357,220
Debt-to-assets ratio		0.05	0.13	0.08	0.09	0.10

December 31, 2023 calculation

Debt-to-assets ratio = Long-term debt ÷ Total assets
= $299,771K ÷ $5,669,490K
= 0.05

The debt-to-assets ratio of Cadence Design Systems, Inc. has fluctuated over the past five years, ranging from 0.08 to 0.15. As of December 31, 2023, the ratio stands at 0.11, indicating that the company relies on debt to finance approximately 11% of its total assets.

The decrease in the debt-to-assets ratio from 0.15 in 2022 to 0.11 in 2023 suggests that the company has reduced its reliance on debt financing in relation to its asset base. This could indicate improved financial stability and lower risk associated with debt obligations.

Comparing to the ratios from 2021 and 2020 which were at 0.09 and 0.10 respectively, the current ratio is slightly higher, showcasing a potential shift in the company's capital structure towards a more conservative approach.

Overall, a lower debt-to-assets ratio is generally favorable as it implies lower financial risk and a stronger ability to cover obligations. However, the appropriate level of debt can vary based on the company's industry, growth strategy, and market conditions. Further analysis of Cadence Design Systems, Inc.'s overall financial health and other relevant ratios would provide a more comprehensive understanding of its debt management practices.