Century Aluminum Company (CENX)
Debt-to-equity 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-equity ratio | 1.21 | 0.96 | 0.78 | 0.45 | 0.37 |
December 31, 2023 calculation
Debt-to-equity ratio = Long-term debt ÷ Total stockholders’ equity
= $430,900K ÷ $355,600K
= 1.21
The debt-to-equity ratio of Century Aluminum Company has been trending upwards over the past five years, indicating a higher level of leverage in the company's capital structure. In 2019, the ratio stood at 0.37, which then increased to 0.45 in 2020, 0.78 in 2021, 0.96 in 2022, and further to 1.21 in 2023.
This escalating trend suggests that Century Aluminum has been relying more on debt financing relative to equity financing to support its operations and growth initiatives. A higher debt-to-equity ratio could potentially indicate increased financial risk and vulnerability to economic downturns or interest rate fluctuations.
It is essential for investors and creditors to closely monitor this ratio to assess the company's ability to manage its debt levels effectively and sustain its financial health in the long run. Additionally, management should consider maintaining a balanced capital structure to mitigate risks associated with excessive leverage.
Peer comparison
Dec 31, 2023