Flex Ltd (FLEX)

Debt-to-equity 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-equity ratio		0.61	0.66	0.79	1.02	0.95

March 31, 2024 calculation

Debt-to-equity ratio = Long-term debt ÷ Total stockholders’ equity
= $3,261,000K ÷ $5,325,000K
= 0.61

Flex Ltd's debt-to-equity ratio has exhibited a downward trend over the past five years, indicating a progressive reduction in the company's reliance on debt to finance its operations and investments. In particular, the ratio decreased from 1.02 in March 2021 to 0.61 in March 2024, reflecting a significant improvement in the company's overall financial leverage. This suggests that Flex Ltd has been gradually strengthening its financial position by either reducing its debt levels or increasing its equity base.

A debt-to-equity ratio of 0.61 as of March 31, 2024, implies that Flex Ltd's debt is 61% of its shareholders' equity. This suggests a moderate level of debt relative to equity, signaling a balanced capital structure that is not overly reliant on borrowing. The decreasing trend in the ratio also indicates that the company has been effectively managing its debt levels in recent years, which can enhance its financial stability and resilience to economic downturns.

Overall, the decreasing trend in Flex Ltd's debt-to-equity ratio indicates a positive development in the company's financial health and suggests a prudent approach to capital structure management. However, it may be important to continue monitoring this ratio to ensure that the company maintains an optimal balance between debt and equity financing.