Fastenal Company (FAST)
Debt-to-capital ratio
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Long-term debt | US$ in thousands | 125,000 | 125,000 | 125,000 | 200,000 | 200,000 | 200,000 | 200,000 | 200,000 | 353,200 | 404,700 | 310,000 | 330,000 | 330,000 | 330,000 | 365,000 | 365,000 | 365,000 | 365,000 | 405,000 | 450,100 |
| Total stockholders’ equity | US$ in thousands | 3,616,300 | 3,597,400 | 3,495,600 | 3,429,200 | 3,348,800 | 3,466,600 | 3,380,800 | 3,270,600 | 3,163,200 | 3,161,200 | 3,178,700 | 3,142,000 | 3,042,200 | 2,964,700 | 2,880,800 | 2,786,700 | 2,733,200 | 2,885,600 | 2,783,000 | 2,656,600 |
| Debt-to-capital ratio | 0.03 | 0.03 | 0.03 | 0.06 | 0.06 | 0.05 | 0.06 | 0.06 | 0.10 | 0.11 | 0.09 | 0.10 | 0.10 | 0.10 | 0.11 | 0.12 | 0.12 | 0.11 | 0.13 | 0.14 |
December 31, 2024 calculation
Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $125,000K ÷ ($125,000K + $3,616,300K)
= 0.03
The debt-to-capital ratio of Fastenal Company has been on a decreasing trend from 0.14 as of March 31, 2020, to 0.03 as of December 31, 2024. This ratio indicates the proportion of the company's capital that is financed through debt. A lower debt-to-capital ratio suggests that the company relies more on equity financing rather than debt to fund its operations and investments, which can be viewed positively by investors and creditors as it indicates lower financial risk.
The decreasing trend in the debt-to-capital ratio for Fastenal Company over the years shows a reduction in the level of debt relative to the company's total capital, implying improved financial stability and a stronger financial position. This may be a strategic decision by the company to reduce leverage, enhance solvency, and lower interest expenses, which could lead to increased financial flexibility and better overall performance. Overall, a declining debt-to-capital ratio is generally considered favorable, as it signifies a healthier balance between debt and equity in the company's capital structure.
Peer comparison
Dec 31, 2024