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