ESCO Technologies Inc (ESE)
Debt-to-capital 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 stockholders’ equity | US$ in thousands | 1,131,140 | 1,048,160 | 1,019,700 | 959,026 | 826,222 |
| Debt-to-capital ratio | 0.07 | 0.11 | 0.12 | 0.04 | 0.24 |
September 30, 2023 calculation
Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $82,000K ÷ ($82,000K + $1,131,140K)
= 0.07
The debt-to-capital ratio is an important measure of a company's financial leverage and its ability to meet its long-term obligations. It indicates the proportion of a company's capital that is financed through debt. Esco Technologies, Inc.'s debt-to-capital ratio has fluctuated over the past five years.
In 2023, the debt-to-capital ratio stood at 0.08, indicating that only 8% of the company's capital is financed through debt. This represents a decrease from the previous year, suggesting a favorable trend towards lower reliance on debt for financing.
Comparing this to earlier years, in 2022 and 2021, the ratio was 0.13, signifying that 13% of the company's capital was financed through debt. There was a notable increase from 2020, where the ratio was 0.06, indicating lower debt reliance.
The most significant observation is the ratio in 2019, which was 0.26. This indicated that 26% of the capital was financed through debt, signifying higher leverage and potential financial risk for the company.
The decreasing trend in the debt-to-capital ratio suggests that Esco Technologies, Inc. has been gradually reducing its reliance on debt for funding its operations and growth, which could be viewed positively by investors and lenders. However, it is imperative to further investigate the reasons behind this fluctuation and assess the company's overall financial health and sustainability.
Peer comparison
Sep 30, 2023