Dover Corporation (DOV)
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 | 2,991,760 | 2,942,510 | 3,018,710 | 3,108,830 | 2,985,720 |
| Total stockholders’ equity | US$ in thousands | 5,106,600 | 4,286,370 | 4,189,530 | 3,385,770 | 3,032,660 |
| Debt-to-capital ratio | 0.37 | 0.41 | 0.42 | 0.48 | 0.50 |
December 31, 2023 calculation
Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $2,991,760K ÷ ($2,991,760K + $5,106,600K)
= 0.37
The debt-to-capital ratio of Dover Corp. reflects the proportion of the company's total debt in relation to its total capital, including both debt and equity. Observing the trend from 2019 to 2023, we can see a gradual decrease in the ratio, indicating a reduction in the company's reliance on debt to finance its operations.
In 2019, the ratio stood at 0.50, indicating that 50% of the company's capital was sourced from debt. Subsequently, the ratio decreased to 0.48 in 2020, 0.43 in 2021, 0.46 in 2022, and finally reaching 0.40 in 2023. This downward trend suggests that Dover Corp. has been actively managing its debt levels relative to its capital over the years.
A decreasing debt-to-capital ratio can signal improved financial health and reduced financial risk for the company. It may indicate that Dover Corp. is becoming less dependent on external borrowings and is possibly utilizing more equity financing or generating sufficient internal funds to support its operations and investments.
However, it is essential to consider the industry norms and peers' ratios for a more comprehensive assessment of Dover Corp.'s debt management strategy and financial position. Additionally, a deeper analysis of other financial metrics and factors influencing the company's capital structure would provide a more holistic view of its overall financial health and stability.
Peer comparison
Dec 31, 2023