Cognizant Technology Solutions Corp Class A (CTSH)

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	606,000	638,000	626,000	663,000	700,000
Total stockholders’ equity	US$ in thousands	13,227,000	12,309,000	11,991,000	10,836,000	11,022,000
Debt-to-capital ratio		0.04	0.05	0.05	0.06	0.06

December 31, 2023 calculation

Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $606,000K ÷ ($606,000K + $13,227,000K)
= 0.04

The debt-to-capital ratio of Cognizant Technology Solutions Corp. has remained relatively consistent over the past five years, ranging from 0.05 to 0.06. This indicates that the company has maintained a conservative financing approach, with a low level of debt relative to its total capital structure.

A debt-to-capital ratio of 0.05 to 0.06 suggests that Cognizant Technology Solutions Corp. relies more on equity financing rather than debt to fund its operations and investment activities. This can be seen as a positive signal to investors and creditors, as lower levels of debt indicate lower financial risk and potential for financial distress.

Overall, the stability of Cognizant's debt-to-capital ratio over the years reflects a prudent capital structure management strategy, balancing the use of debt to leverage growth opportunities while maintaining financial stability.