Emerson Electric Company (EMR)

Debt-to-capital ratio

		Sep 30, 2024	Sep 30, 2023	Sep 30, 2022	Sep 30, 2021	Sep 30, 2020
Long-term debt	US$ in thousands	7,155,000	7,610,000	8,259,000	5,793,000	6,326,000
Total stockholders’ equity	US$ in thousands	21,636,000	20,689,000	10,364,000	9,883,000	8,405,000
Debt-to-capital ratio		0.25	0.27	0.44	0.37	0.43

September 30, 2024 calculation

Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $7,155,000K ÷ ($7,155,000K + $21,636,000K)
= 0.25

Emerson Electric Company's debt-to-capital ratio has shown fluctuating trends over the past five years. As of September 30, 2024, the ratio stands at 0.25, indicating that 25% of the company's capital structure is financed by debt. This represents an improvement from the previous year, where the ratio was at 0.27.

The downward trend in the debt-to-capital ratio over the last two years suggests that Emerson Electric has been reducing its reliance on debt to fund its operations and investments. A lower debt-to-capital ratio is generally viewed positively by investors and creditors as it implies lower financial risk and greater financial stability.

However, it is worth noting that the ratio was significantly higher in the fiscal year 2022 at 0.44, indicating a relatively higher level of debt in the company's capital structure compared to the most recent year. The company seems to have made efforts to bring down its debt levels since then.

Overall, Emerson Electric Company's debt-to-capital ratio of 0.25 in 2024 shows a healthy balance between debt and equity financing, reflecting the company's prudent financial management strategies towards achieving sustainable growth and financial health.