Cleveland-Cliffs Inc (CLF)
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 | 3,137,000 | 4,249,000 | 5,238,000 | 5,390,000 | 2,114,000 |
| Total stockholders’ equity | US$ in thousands | 7,887,000 | 7,791,000 | 5,490,000 | 2,018,000 | 358,000 |
| Debt-to-equity ratio | 0.40 | 0.55 | 0.95 | 2.67 | 5.91 |
December 31, 2023 calculation
Debt-to-equity ratio = Long-term debt ÷ Total stockholders’ equity
= $3,137,000K ÷ $7,887,000K
= 0.40
The debt-to-equity ratio of Cleveland-Cliffs Inc has been on a declining trend over the past five years, indicating a reduction in the company's reliance on debt financing compared to equity. The ratio decreased from 5.91 in 2019 to 0.40 in 2023. This significant decrease suggests that the company has been actively managing its debt levels and improving its financial leverage, which is generally viewed positively by investors and creditors.
The reduction in the debt-to-equity ratio could result from various factors, such as debt repayment, improved profitability leading to stronger equity levels, or a combination of both. A lower debt-to-equity ratio signifies lower financial risk and greater financial stability for the company, as it indicates that a smaller portion of the company's assets is funded by debt.
Overall, the downward trend in Cleveland-Cliffs Inc's debt-to-equity ratio reflects a more balanced capital structure and improved financial health, which could enhance the company's ability to weather economic downturns and pursue growth opportunities in the future.
Peer comparison
Dec 31, 2023