Churchill Downs Incorporated (CHDN)
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 | 4,768,300 | 4,558,700 | 1,961,000 | 1,618,300 | 1,469,900 |
| Total stockholders’ equity | US$ in thousands | 893,600 | 551,500 | 306,800 | 367,100 | 508,300 |
| Debt-to-capital ratio | 0.84 | 0.89 | 0.86 | 0.82 | 0.74 |
December 31, 2023 calculation
Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $4,768,300K ÷ ($4,768,300K + $893,600K)
= 0.84
The debt-to-capital ratio of Churchill Downs, Inc. has shown an increasing trend over the past five years. In 2019, the ratio was at 0.74, indicating that 74% of the company's capital was financed through debt. Subsequently, the ratio increased to 0.82 in 2020, 0.87 in 2021, and 0.89 in 2022, before reaching 0.84 in 2023.
This upward trend suggests that Churchill Downs, Inc. has been relying more on debt to finance its operations and growth initiatives compared to its capital. A higher debt-to-capital ratio may indicate increased financial risk as the company has a larger proportion of debt in its capital structure.
It is essential for stakeholders to monitor this ratio closely to assess the company's leverage and ability to meet its debt obligations. Additionally, management should consider strategies to maintain a balanced capital structure that ensures financial stability and sustainability in the long term.