Embecta Corp (EMBC)

Debt-to-capital ratio

		Sep 30, 2024	Sep 30, 2023	Sep 30, 2022
Long-term debt	US$ in thousands	1,565,300	1,593,900	1,598,100
Total stockholders’ equity	US$ in thousands	-738,300	-821,700	-891,400
Debt-to-capital ratio		1.89	2.06	2.26

September 30, 2024 calculation

Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $1,565,300K ÷ ($1,565,300K + $-738,300K)
= 1.89

The debt-to-capital ratio measures the proportion of a company's total debt to its total capital, which includes both debt and equity. Embecta Corp's debt-to-capital ratio has shown a declining trend over the past three years, decreasing from 2.26 in 2022 to 2.06 in 2023, and further dropping to 1.89 in 2024. This indicates that the company has been reducing its reliance on debt financing relative to its total capital structure. A lower debt-to-capital ratio suggests a lower risk of financial distress and higher financial stability for the company, as it has a smaller proportion of debt in its capital structure. It also implies that Embecta Corp may have been focusing on deleveraging or using more equity financing to fund its operations and investments. Overall, a declining debt-to-capital ratio can be seen as a positive trend for Embecta Corp's financial health and risk management.