Coty Inc (COTY)

Debt-to-capital ratio

		Jun 30, 2024	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020
Long-term debt	US$ in thousands	3,841,800	4,178,200	4,409,100	5,401,000	7,892,100
Total stockholders’ equity	US$ in thousands	3,827,100	3,811,100	3,154,500	2,860,700	3,004,600
Debt-to-capital ratio		0.50	0.52	0.58	0.65	0.72

June 30, 2024 calculation

Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $3,841,800K ÷ ($3,841,800K + $3,827,100K)
= 0.50

The debt-to-capital ratio of Coty Inc has been showing a declining trend over the past five years, indicating an improvement in the company's leverage position. The ratio decreased from 0.72 in June 2020 to 0.50 in June 2024. This suggests that Coty has been reducing its reliance on debt to finance its operations and investments relative to its total capital structure over the years.

A decreasing debt-to-capital ratio generally indicates a healthier financial position, as it means the company is using less debt to support its operations and growth. This trend could be a positive signal for investors and creditors as it reflects a lower risk of financial distress and default.

Coty Inc's management may have been working on reducing debt levels, improving cash flow generation, or optimizing its capital structure. A lower debt-to-capital ratio can also indicate the company's ability to generate sufficient earnings to cover interest payments and debt obligations.

Overall, the declining trend in Coty Inc's debt-to-capital ratio signals an improvement in the company's financial leverage and possibly a more sustainable capital structure in recent years.