Fastenal Company (FAST)

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 200,000 353,200 330,000 365,000 342,000
Total stockholders’ equity US$ in thousands 3,348,800 3,163,200 3,042,200 2,733,200 2,665,600
Debt-to-equity ratio 0.06 0.11 0.11 0.13 0.13

December 31, 2023 calculation

Debt-to-equity ratio = Long-term debt ÷ Total stockholders’ equity
= $200,000K ÷ $3,348,800K
= 0.06

The debt-to-equity ratio of Fastenal Co. has exhibited fluctuations over the past five years. The ratio decreased from 0.18 in 2019 to 0.13 in 2021, remained the same in 2020, increased to 0.18 in 2022, and decreased again to 0.08 in 2023.

A relatively low debt-to-equity ratio, such as 0.08 in 2023, indicates that Fastenal Co. relies more on equity financing rather than debt to fund its operations and growth. This signifies a lower financial risk and suggests a strong financial position, as the company can fund its activities with a lower level of debt.

However, the fluctuation in the ratio over the years could indicate varying strategies in capital structure management, potentially reflecting changes in business conditions or investment decisions. It would be beneficial for stakeholders to further investigate the reasons behind these fluctuations to better understand the company's financial health and risk profile.


Peer comparison

Dec 31, 2023

Company name
Symbol
Debt-to-equity ratio
Fastenal Company
FAST
0.06
Sherwin-Williams Co
SHW
2.25
Tractor Supply Company
TSCO
0.80