Fastenal Company (FAST)
Debt-to-assets ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Long-term debt | US$ in thousands | 200,000 | 353,200 | 330,000 | 365,000 | 342,000 |
| Total assets | US$ in thousands | 4,462,900 | 4,548,600 | 4,299,000 | 3,964,700 | 3,799,900 |
| Debt-to-assets ratio | 0.04 | 0.08 | 0.08 | 0.09 | 0.09 |
December 31, 2023 calculation
Debt-to-assets ratio = Long-term debt ÷ Total assets
= $200,000K ÷ $4,462,900K
= 0.04
The debt-to-assets ratio measures the proportion of a company's assets that are financed through debt. A lower ratio implies less dependency on debt for funding its operations.
Fastenal Co.'s debt-to-assets ratio has been fluctuating over the past five years. In 2023, the ratio decreased to 0.06 from 0.12 in 2022, indicating a significant reduction in the proportion of debt used to finance its assets. This reduction may suggest that Fastenal Co. has been paying off its debts or increasing its asset base through equity financing.
Comparing to the 2021 and 2020 ratios of 0.09 and 0.10, respectively, the 2023 ratio of 0.06 reflects a healthier financial position with a lower reliance on debt. However, the 2019 ratio of 0.09 is similar to the 2023 ratio, indicating a potential return to previous debt levels after the decrease in 2022.
Overall, the trend in Fastenal Co.'s debt-to-assets ratio signals a variable approach to debt management, with the company possibly adjusting its capital structure over the years. Further analysis of the company's financial strategy and the reasons behind these fluctuations would provide valuable insights into its financial health and sustainability.
Peer comparison
Dec 31, 2023