Calavo Growers Inc (CVGW)
Debt-to-capital ratio
| Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | ||
|---|---|---|---|---|---|---|
| Long-term debt | US$ in thousands | 7,300 | 6,000 | 7,100 | 7,100 | 6,200 |
| Total stockholders’ equity | US$ in thousands | 208,837 | 222,356 | 225,515 | 254,530 | 284,181 |
| Debt-to-capital ratio | 0.03 | 0.03 | 0.03 | 0.03 | 0.02 |
October 31, 2023 calculation
Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $7,300K ÷ ($7,300K + $208,837K)
= 0.03
The debt-to-capital ratio measures the extent to which a company is financed by debt relative to its total capital structure. Calavo Growers, Inc's debt-to-capital ratio has fluctuated over the past five years, indicating changes in its debt and equity financing mix.
In 2023, the debt-to-capital ratio stands at 0.18, signifying that 18% of the company's capital is derived from debt. This represents a significant increase from the previous year's ratio of 0.03, suggestive of a higher reliance on debt financing in 2023. This shift may indicate a strategic decision to leverage debt to fund growth opportunities or investment in assets.
In 2022, the debt-to-capital ratio was considerably lower at 0.03, indicating a more conservative capital structure with only 3% of capital funded by debt. This suggests that the company may have pursued a more equity-driven approach to financing its operations and expansion initiatives during this period.
The ratio spiked to 0.17 in 2021, reflecting a notable increase in the proportion of debt in Calavo Growers, Inc’s capital structure compared to the previous year. This shift could signify a deliberate move towards leveraging debt to fund business activities, potentially indicating an aggressive expansion strategy or a response to changing market conditions.
In 2020, the debt-to-capital ratio was 0.10, representing a moderate increase from the prior year. This suggests a slight uptick in the company's reliance on debt financing, potentially as a means to capitalize on growth opportunities or to address liquidity needs.
In 2019, the ratio was at its lowest point at 0.02, denoting a minimal presence of debt in the company's overall capital structure. This suggests a more conservative or balanced approach to financing, with a greater emphasis on equity funding.
Overall, the fluctuation in Calavo Growers, Inc's debt-to-capital ratio over the past five years appears to reflect dynamic shifts in its capital structure and financing strategies, potentially influenced by varying business needs, growth objectives, and market conditions. Investors and stakeholders may interpret these changes as indicators of the company's adaptability to financial dynamics and its strategic stance towards leveraging debt as part of its long-term investment and growth plans.