ESCO Technologies Inc (ESE)
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 | 82,000 | 133,000 | 134,000 | 40,000 | 265,000 |
| Total assets | US$ in thousands | 1,683,210 | 1,654,460 | 1,577,340 | 1,370,190 | 1,466,700 |
| Debt-to-assets ratio | 0.05 | 0.08 | 0.08 | 0.03 | 0.18 |
September 30, 2023 calculation
Debt-to-assets ratio = Long-term debt ÷ Total assets
= $82,000K ÷ $1,683,210K
= 0.05
The debt-to-assets ratio measures the proportion of a company's assets that are financed by debt. Esco Technologies, Inc.'s debt-to-assets ratio has shown a decreasing trend over the past five years, declining from 0.20 in 2019 to 0.06 in 2023. This indicates that the company has been relying less on debt to finance its assets.
A lower debt-to-assets ratio suggests a lower financial risk as it implies that a smaller portion of the company's assets is being funded by debt. This can be viewed favorably by investors and creditors, as it indicates a healthier balance sheet.
Esco Technologies' decreasing debt-to-assets ratio may be attributed to various factors such as prudent financial management, increased profitability, or a strategy of using more equity financing. It is important to note that while a lower debt-to-assets ratio is generally positive, it is essential to consider the company's specific industry, capital structure, and overall financial health when interpreting this ratio.
Peer comparison
Sep 30, 2023