Emerson Electric Company (EMR)

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	7,610,000	8,259,000	5,793,000	6,326,000	4,277,000
Total assets	US$ in thousands	42,746,000	35,672,000	24,715,000	22,882,000	20,497,000
Debt-to-assets ratio		0.18	0.23	0.23	0.28	0.21

September 30, 2023 calculation

Debt-to-assets ratio = Long-term debt ÷ Total assets
= $7,610,000K ÷ $42,746,000K
= 0.18

The debt-to-assets ratio is a key financial metric that indicates the proportion of a company's assets that are financed through debt. A lower debt-to-assets ratio generally signifies lower financial risk and a stronger financial position.

Looking at the trend in Emerson Electric Co.'s debt-to-assets ratio over the past five years, we see a gradual decline from 0.28 in 2019 to 0.19 in 2023. This trend indicates that the company has been successful in reducing the proportion of its assets financed by debt over this period.

In 2023, the debt-to-assets ratio of 0.19 suggests that only 19% of Emerson Electric Co.'s assets are financed by debt, while the remaining 81% are financed by equity. This indicates a conservative capital structure, demonstrating that the company relies more on equity financing than debt financing to fund its operations and investments.

The decreasing trend in the debt-to-assets ratio indicates that Emerson Electric Co. has been effectively managing its debt levels in relation to its assets. This can be seen as a positive signal to investors and creditors, as it suggests a lower risk of financial distress and potential for greater financial stability.

Overall, the decreasing trend in Emerson Electric Co.'s debt-to-assets ratio reflects a prudent approach to capital structure management, indicating a decreasing reliance on debt financing and a strengthening financial position. This trend may enhance the company's ability to weather economic downturns and pursue growth opportunities while maintaining a healthy balance sheet.