Deere & Company (DE)
Debt-to-capital ratio
| Oct 29, 2023 | Oct 30, 2022 | Oct 31, 2021 | Nov 1, 2020 | Nov 3, 2019 | ||
|---|---|---|---|---|---|---|
| Long-term debt | US$ in thousands | — | — | 32,888,000 | 32,734,000 | — |
| Total stockholders’ equity | US$ in thousands | 21,785,000 | 20,262,000 | 18,431,000 | 12,937,000 | 11,413,000 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.64 | 0.72 | 0.00 |
October 29, 2023 calculation
Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $—K ÷ ($—K + $21,785,000K)
= 0.00
The debt-to-capital ratio measures the proportion of a company's capital structure that is financed by debt. Looking at the trend for Deere & Co. over the past five years, we observe a fluctuating pattern in the ratio.
In the most recent fiscal year ending October 29, 2023, the debt-to-capital ratio increased to 0.74 from 0.72 in the previous year. This suggests that there was a rise in the proportion of the company's capital financed by debt. It's important to note that a higher ratio indicates higher financial leverage and potential risk due to increased dependence on debt financing.
Comparing this to the ratio in fiscal year 2020, which stood at 0.78, the current ratio indicates a slight improvement in the company's capital structure as it has reduced its reliance on debt. However, it's worth noting that the ratio has been above 0.70 for the past five years, signifying the significant presence of debt in Deere & Co.'s capital structure.
It would be important to delve into the reasons behind these fluctuations, understanding the company's borrowing practices, investment decisions, and overall financial strategy to assess the implications of the changes in the debt-to-capital ratio. Additionally, monitoring this ratio in conjunction with other financial performance metrics would provide a more comprehensive insight into the company's financial health.
Peer comparison
Oct 29, 2023