Eaton Corporation PLC (ETN)
Debt-to-capital ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 19,036,000 | 17,038,000 | 16,413,000 | 14,930,000 | 16,082,000 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
December 31, 2023 calculation
Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $—K ÷ ($—K + $19,036,000K)
= 0.00
Eaton Corporation plc's debt-to-capital ratio has been relatively stable over the past five years, ranging from 0.33 to 0.35. This ratio indicates the proportion of the company's capital structure that is financed by debt. A decreasing trend in the ratio could signify a decreasing reliance on debt financing, which may positively impact the company's financial stability and risk profile. However, it is important to note that a consistently low debt-to-capital ratio may also indicate underutilization of debt financing, potentially missing out on the tax advantages and leverage benefits that debt can provide. Overall, a consistent and moderate debt-to-capital ratio suggests a balanced capital structure that combines both debt and equity financing to support the company's operations and growth objectives.
Peer comparison
Dec 31, 2023