ChampionX Corporation (CHX)
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 | 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-equity ratio | 0.35 | 0.37 | 0.39 | 0.56 | 0.54 |
December 31, 2023 calculation
Debt-to-equity ratio = Long-term debt ÷ Total stockholders’ equity
= $594,283K ÷ $1,676,620K
= 0.35
The trend of ChampionX Corp.'s debt-to-equity ratio over the past five years shows a gradual decrease from 0.55 in 2019 to 0.36 in 2023. This indicates that the company has been progressively reducing its reliance on debt to finance its operations and investments relative to shareholder equity.
A decreasing debt-to-equity ratio can be a positive indicator as it suggests improved financial stability and lower financial risk for the company. It shows that ChampionX is becoming less leveraged and is relying more on equity financing, which can enhance its long-term sustainability and flexibility in managing its capital structure.
The consistent decline in the debt-to-equity ratio reflects prudent financial management by ChampionX Corp., demonstrating a conservative approach to capital structure and financial risk management over the years. This trend may be seen positively by investors and creditors as it signifies a stronger financial position and better ability to weather economic uncertainties.
Peer comparison
Dec 31, 2023