Flex Ltd (FLEX)
Debt-to-capital ratio
| Mar 31, 2024 | Mar 31, 2023 | Mar 31, 2022 | Mar 31, 2021 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|
| Long-term debt | US$ in thousands | 3,261,000 | 3,544,000 | 3,248,000 | 3,515,000 | 2,689,000 |
| Total stockholders’ equity | US$ in thousands | 5,325,000 | 5,351,000 | 4,129,000 | 3,436,000 | 2,831,000 |
| Debt-to-capital ratio | 0.38 | 0.40 | 0.44 | 0.51 | 0.49 |
March 31, 2024 calculation
Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $3,261,000K ÷ ($3,261,000K + $5,325,000K)
= 0.38
Flex Ltd's debt-to-capital ratio has been gradually decreasing over the five-year period from 2020 to 2024. The ratio decreased from 0.49 in 2020 to 0.38 in 2024, indicating a positive trend of reducing reliance on debt to finance its operations compared to its total capital structure.
A lower debt-to-capital ratio suggests that the company is using less debt relative to its total capital, which can be seen as a positive signal for investors and creditors. It indicates a healthier balance sheet structure with a lower level of financial risk, as the company is financing a smaller portion of its operations through debt.
Overall, the decreasing trend in the debt-to-capital ratio for Flex Ltd over the five-year period suggests an improvement in the company's financial health and a more conservative approach to managing its capital structure.
Peer comparison
Mar 31, 2024