Eaton Corporation PLC (ETN)
Debt-to-equity 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-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
December 31, 2023 calculation
Debt-to-equity ratio = Long-term debt ÷ Total stockholders’ equity
= $—K ÷ $19,036,000K
= 0.00
The debt-to-equity ratio of Eaton Corporation plc has shown a declining trend over the past five years, indicating an improvement in the company's financial leverage and solvency position. The ratio decreased from 0.52 in 2019 to 0.49 in 2023. This suggests that the company has been relying less on debt financing relative to equity to fund its operations and investments.
A lower debt-to-equity ratio can signify a reduced level of financial risk for the company, as it suggests a lower dependence on borrowed funds. It also implies that there is a larger proportion of equity financing in the capital structure, which can be viewed positively by investors and creditors.
Overall, the declining trend in Eaton Corporation plc's debt-to-equity ratio over the period under consideration is a favorable indication of the company's financial stability and prudent financial management.
Peer comparison
Dec 31, 2023