Digi International Inc (DGII)

Debt-to-assets ratio

		Sep 30, 2023	Sep 30, 2022	Sep 30, 2021	Sep 30, 2020	Sep 30, 2019
Long-term debt	US$ in thousands	188,051	222,448	45,799	58,980	—
Total assets	US$ in thousands	835,531	853,895	619,531	528,682	398,698
Debt-to-assets ratio		0.23	0.26	0.07	0.11	0.00

September 30, 2023 calculation

Debt-to-assets ratio = Long-term debt ÷ Total assets
= $188,051K ÷ $835,531K
= 0.23

The debt-to-assets ratio is a key financial metric that reflects the proportion of a company's assets financed by debt. A lower ratio indicates lower financial risk, as it suggests that a smaller portion of the company's assets is funded by debt, whereas a higher ratio may indicate greater financial leverage and associated risk.

Examining Digi International, Inc.'s debt-to-assets ratio over the past five years reveals fluctuations in the company's leverage and financial risk. In 2023, the debt-to-assets ratio stands at 0.24, showing a decrease from the previous year's 0.28. This decline suggests a reduction in the proportion of assets financed by debt, indicating potentially lower financial risk and improved financial stability.

Comparing the 2023 ratio to that of 2021, when the ratio was 0.07, and 2020, when the ratio was 0.12, we observe a notable increase in leverage over the past three years. This progression indicates a growing reliance on debt to finance assets, potentially increasing the company's financial risk.

Moreover, the significant rise from 0.00 in 2019 to 0.07 in 2021 signals a shift towards more debt-funded assets, potentially raising concerns about the company's financial risk and stability during this period.

It is important for stakeholders to closely monitor the trend in Digi International's debt-to-assets ratio, as persistent increases in the ratio could indicate rising financial risk and a potentially unsustainable capital structure. Conversely, a declining trend could signify improved financial stability and a more conservative capital structure, which could be viewed favorably by investors and creditors.

In summary, the debt-to-assets ratio analysis for Digi International, Inc. suggests that the company has experienced fluctuations in its leverage and financial risk over the past five years, with the 2023 ratio indicating a reduction in the proportion of assets financed by debt compared to the previous year. This trend highlights the importance of ongoing monitoring and analysis of the company's capital structure and financial risk.