Century Aluminum Company (CENX)
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 | 430,900 | 381,600 | 329,800 | 243,100 | 249,200 |
| Total stockholders’ equity | US$ in thousands | 355,600 | 399,300 | 421,000 | 546,100 | 675,000 |
| Debt-to-capital ratio | 0.55 | 0.49 | 0.44 | 0.31 | 0.27 |
December 31, 2023 calculation
Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $430,900K ÷ ($430,900K + $355,600K)
= 0.55
The debt-to-capital ratio of Century Aluminum Company has shown an increasing trend over the past five years, indicating a rising reliance on debt financing relative to total capital. The ratio increased from 0.27 in 2019 to 0.55 in 2023. This suggests that the company has been taking on more debt in recent years to fund its operations or expansion initiatives.
A debt-to-capital ratio of 0.55 as of December 31, 2023, means that debt accounts for 55% of the company's total capital structure. This indicates that more than half of Century Aluminum Company's capital is funded through debt, which may pose higher risks due to interest payments and potential financial obligations.
The increase in the debt-to-capital ratio could indicate that Century Aluminum Company has been leveraging more to support its growth strategies or finance capital-intensive projects. However, a higher ratio also implies increased financial risk and interest rate sensitivity, which could impact the company's financial flexibility and future profitability.
It would be essential for investors and stakeholders to monitor how Century Aluminum manages its debt levels going forward to ensure sustainable financial health and stability. Additionally, the company's ability to generate sufficient cash flows to service its debt obligations will be crucial for its long-term viability.
Peer comparison
Dec 31, 2023