Enerpac Tool Group Corp (EPAC)
Debt-to-equity ratio
| Aug 31, 2023 | Aug 31, 2022 | Aug 31, 2021 | Aug 31, 2020 | Aug 31, 2019 | ||
|---|---|---|---|---|---|---|
| Long-term debt | US$ in thousands | 210,337 | 200,000 | 175,000 | 255,000 | 452,945 |
| Total stockholders’ equity | US$ in thousands | 326,620 | 318,611 | 412,198 | 359,226 | 301,179 |
| Debt-to-equity ratio | 0.64 | 0.63 | 0.42 | 0.71 | 1.50 |
August 31, 2023 calculation
Debt-to-equity ratio = Long-term debt ÷ Total stockholders’ equity
= $210,337K ÷ $326,620K
= 0.64
The debt-to-equity ratio is a financial metric used to evaluate a company's capital structure and financial leverage. It is calculated by dividing total debt by total equity. A high debt-to-equity ratio indicates that a company has been aggressive in financing its growth with debt, while a low ratio suggests that it has been using equity to finance its growth.
Looking at the trend of Enerpac Tool Group Corp's debt-to-equity ratio over the past five years, we can observe the following:
1. Aug 31, 2019: The ratio was 1.53, indicating that the company had a high level of debt relative to equity. This could suggest a higher financial risk and potential difficulty in meeting debt obligations.
2. Aug 31, 2020: The ratio decreased to 0.71, which may indicate a reduction in the company's reliance on debt financing or an increase in equity. This could be a positive sign, as it suggests a more balanced capital structure and reduced financial risk.
3. Aug 31, 2021: The ratio further decreased to 0.42, reaching its lowest point in the analyzed period. This indicates a significant shift towards a lower reliance on debt and a stronger equity position. It suggests that the company may be prudently managing its capital structure and financial leverage.
4. Aug 31, 2022: The ratio increased slightly to 0.64, showing a moderate increase in the company's debt relative to equity. While still lower than the 2019 level, this increase warrants monitoring to assess the reasons behind the change and its potential impact on the company's financial risk.
5. Aug 31, 2023: The ratio increased to 0.66, reflecting a continued but slight increase in the company's debt-to-equity ratio. This suggests that the company may be taking on more debt relative to equity, which could potentially increase its financial risk.
In conclusion, Enerpac Tool Group Corp has experienced fluctuations in its debt-to-equity ratio over the past five years. The decreasing trend from 2019 to 2021 indicated a positive shift towards a stronger equity position and improved financial stability. However, the subsequent increases in 2022 and 2023 suggest a potential re-emergence of higher debt levels relative to equity, which should be carefully monitored for its impact on the company's financial risk and capital structure.
Peer comparison
Aug 31, 2023