ChampionX Corporation (CHX)
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 | 594,283 | 621,702 | 697,657 | 905,764 | 555,291 |
| Total stockholders’ equity | US$ in thousands | 1,676,620 | 1,694,550 | 1,770,640 | 1,625,970 | 1,032,960 |
| Debt-to-capital ratio | 0.26 | 0.27 | 0.28 | 0.36 | 0.35 |
December 31, 2023 calculation
Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $594,283K ÷ ($594,283K + $1,676,620K)
= 0.26
The debt-to-capital ratio of ChampionX Corp. has shown a declining trend over the past five years, decreasing from 0.35 in 2019 to 0.26 in 2023. This indicates that the company has been gradually reducing its reliance on debt to finance its operations relative to its total capital structure.
A lower debt-to-capital ratio suggests a stronger financial position and lower financial risk for the company, as it indicates a lower proportion of debt in relation to the total capital employed. This may be favorable to investors and creditors as it signifies a more conservative approach to managing the company's capital structure.
The decreasing trend in the debt-to-capital ratio could be attributed to various factors such as improved financial performance, increased equity financing, or a strategic focus on reducing debt levels. Overall, the declining debt-to-capital ratio over the years reflects positively on the company's financial health and potential for sustainable growth.
Peer comparison
Dec 31, 2023