General Dynamics Corporation (GD)
Debt-to-capital ratio
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Long-term debt | US$ in thousands | 7,260,000 | 8,754,000 | 9,243,000 | 10,490,000 | 9,995,000 |
| Total stockholders’ equity | US$ in thousands | 22,063,000 | 21,299,000 | 18,568,000 | 17,641,000 | 15,661,000 |
| Debt-to-capital ratio | 0.25 | 0.29 | 0.33 | 0.37 | 0.39 |
December 31, 2024 calculation
Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $7,260,000K ÷ ($7,260,000K + $22,063,000K)
= 0.25
The debt-to-capital ratio of General Dynamics Corporation has shown a declining trend over the past five years. Starting at 0.39 as of December 31, 2020, the ratio has consistently decreased to 0.25 by the end of December 31, 2024. This indicates that the company has been reducing its reliance on debt in relation to its overall capital structure over this period.
A decreasing debt-to-capital ratio suggests that General Dynamics Corporation has been managing its debt levels effectively, potentially reducing financial risk and improving its financial stability. By lowering the proportion of debt in its capital structure, the company may be in a better position to withstand economic downturns or volatility in the financial markets.
Investors and creditors often view a decreasing debt-to-capital ratio positively, as it can indicate improved financial health and a more sustainable business model. However, it is essential to consider the specific industry and business circumstances when interpreting this ratio, as different sectors may have varying optimal debt levels.
Overall, the declining trend in General Dynamics Corporation's debt-to-capital ratio reflects a strategic effort to maintain a balanced and prudent approach to managing its capital structure, which could contribute to long-term financial strength and stability.
Peer comparison
Dec 31, 2024