Clearwater Paper Corporation (CLW)
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 | 462,300 | 564,900 | 637,600 | 716,400 | 884,500 |
| Total stockholders’ equity | US$ in thousands | 668,800 | 572,100 | 511,700 | 521,100 | 432,000 |
| Debt-to-capital ratio | 0.41 | 0.50 | 0.55 | 0.58 | 0.67 |
December 31, 2023 calculation
Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $462,300K ÷ ($462,300K + $668,800K)
= 0.41
Clearwater Paper Corp's debt-to-capital ratio has exhibited a declining trend over the past five years, decreasing from 0.68 in 2019 to 0.41 in 2023. This indicates an improvement in the company's leverage position as a lower ratio signifies that a lower proportion of the company's capital structure is funded by debt.
The decreasing trend in the debt-to-capital ratio suggests that Clearwater Paper Corp has been reducing its reliance on debt financing in recent years. A lower debt-to-capital ratio can be seen as a positive sign as it may indicate a lower financial risk and greater financial stability for the company.
Overall, the declining debt-to-capital ratio for Clearwater Paper Corp implies a strengthening financial position and a more conservative approach to capital structure management. It suggests that the company is moving towards a healthier and more sustainable financial structure by reducing its debt levels relative to its total capital.