Century Aluminum Company (CENX)
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 | 430,900 | 381,600 | 329,800 | 243,100 | 249,200 |
| Total assets | US$ in thousands | 1,846,500 | 1,472,000 | 1,569,900 | 1,399,600 | 1,499,700 |
| Debt-to-assets ratio | 0.23 | 0.26 | 0.21 | 0.17 | 0.17 |
December 31, 2023 calculation
Debt-to-assets ratio = Long-term debt ÷ Total assets
= $430,900K ÷ $1,846,500K
= 0.23
The debt-to-assets ratio of Century Aluminum Company has fluctuated over the past five years. In 2023, the ratio stood at 0.23, which indicates that 23% of the company's assets are financed by debt. This represents a decrease from the previous year when the ratio was 0.26. Furthermore, the ratio has shown an increasing trend from 2020 to 2022, where it reached the highest point at 0.26.
The downward trend in the debt-to-assets ratio from 2022 to 2023 suggests that the company may have either reduced its debt levels or increased its asset base during the year. A lower debt-to-assets ratio can signify improved financial stability and lower financial risk for the company, as it is relying less on debt to finance its assets.
However, it is essential to consider that a low debt-to-assets ratio can also indicate underutilization of debt financing opportunities that could potentially enhance the company's growth and profitability. Therefore, it is crucial for management to strike a balance between debt and equity financing to optimize the company's capital structure and maximize shareholder value.
Peer comparison
Dec 31, 2023