Emerson Electric Company (EMR)

Debt-to-capital ratio

		Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019
Long-term debt	US$ in thousands	7,155,000	7,111,000	7,614,000	7,632,000	7,610,000	7,642,000	8,174,000	8,159,000	8,259,000	8,367,000	8,203,000	8,722,000	5,793,000	5,835,000	5,823,000	5,892,000	6,326,000	5,500,000	3,960,000	4,018,000
Total stockholders’ equity	US$ in thousands	21,636,000	20,799,000	20,900,000	20,674,000	20,689,000	20,464,000	11,360,000	10,727,000	10,364,000	10,315,000	10,575,000	10,249,000	9,883,000	9,291,000	9,130,000	8,895,000	8,405,000	7,831,000	7,517,000	8,421,000
Debt-to-capital ratio		0.25	0.25	0.27	0.27	0.27	0.27	0.42	0.43	0.44	0.45	0.44	0.46	0.37	0.39	0.39	0.40	0.43	0.41	0.35	0.32

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

The debt-to-capital ratio of Emerson Electric Company has shown some fluctuations over the past few years. The ratio stood at 0.25 as of September 30, 2024, which was the same level as in the previous quarter. Looking back over the last eight quarters, the ratio has ranged from 0.25 to 0.46.

In general, a lower debt-to-capital ratio indicates that a company relies less on debt to finance its operations and investments, which can be a positive sign of financial stability. Emerson Electric's ratio has generally been below 0.5 over this period, suggesting a conservative approach to leverage.

The significant increase in the ratio in the first quarter of 2023 to 0.42, followed by further increases reaching 0.46 in the fourth quarter of 2021, may indicate a period of increased debt relative to capital. However, the ratio has since declined and stabilized around the 0.25-0.27 levels in the most recent quarters, which may imply a more balanced debt and capital structure.

Overall, Emerson Electric's debt-to-capital ratio trend suggests that the company has managed its debt levels relatively prudently, although close monitoring of any future changes in this ratio would be advisable to assess the company's ongoing financial health and risk profile.