Clean Harbors Inc (CLH)
Debt-to-assets ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Long-term debt | US$ in thousands | 2,291,720 | 2,414,830 | 2,517,020 | 1,549,640 | 1,554,120 |
| Total assets | US$ in thousands | 6,382,870 | 6,129,710 | 5,653,700 | 4,131,520 | 4,108,900 |
| Debt-to-assets ratio | 0.36 | 0.39 | 0.45 | 0.38 | 0.38 |
December 31, 2023 calculation
Debt-to-assets ratio = Long-term debt ÷ Total assets
= $2,291,720K ÷ $6,382,870K
= 0.36
The debt-to-assets ratio of Clean Harbors, Inc. has shown a decreasing trend over the last five years, indicating improved financial health in terms of solvency and risk management. The ratio decreased from 0.45 in 2021 to 0.36 in 2023, suggesting that the company has been reducing its reliance on debt financing relative to its total assets.
A lower debt-to-assets ratio implies that the company has a higher proportion of assets financed by equity rather than debt. This can be seen as a positive sign by investors and creditors as it indicates a lower risk of financial distress in case of economic downturns or other adverse events.
Clean Harbors' consistent decrease in the debt-to-assets ratio could indicate effective debt management strategies, such as debt repayment or increased asset accumulation through internally generated funds. However, it is important to note that a very low ratio could also indicate underutilization of debt to fund growth opportunities or lack of leverage for maximizing returns to shareholders.
Overall, the declining trend of Clean Harbors, Inc.'s debt-to-assets ratio reflects a positive financial position and prudent debt management practices that may contribute to long-term sustainability and stability for the company.
Peer comparison
Dec 31, 2023