Greif Bros Corporation (GEF)
Debt-to-assets ratio
| Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | ||
|---|---|---|---|---|---|---|
| Long-term debt | US$ in thousands | 2,121,400 | 1,839,300 | 2,054,800 | 2,335,500 | 2,659,000 |
| Total assets | US$ in thousands | 5,960,800 | 5,469,900 | 5,815,800 | 5,510,900 | 5,426,700 |
| Debt-to-assets ratio | 0.36 | 0.34 | 0.35 | 0.42 | 0.49 |
October 31, 2023 calculation
Debt-to-assets ratio = Long-term debt ÷ Total assets
= $2,121,400K ÷ $5,960,800K
= 0.36
The debt-to-assets ratio is a key financial metric used to evaluate a company's leverage, or the extent to which it is financing its assets through debt. A higher debt-to-assets ratio indicates that a company has a larger proportion of its assets financed by debt, while a lower ratio suggests a smaller reliance on debt financing. Let's analyze the debt-to-assets ratio trend for Greif Inc over the past five years:
- In October 2023, Greif Inc's debt-to-assets ratio stood at 0.38, indicating that 38% of its assets were financed through debt. This suggests a moderate level of leverage, where a significant portion of the company's assets are financed through equity.
- Comparing this to the previous year, there was a slight increase in the ratio from 0.35 in October 2022 to 0.38 in October 2023. This could indicate a moderate increase in the company's debt financing relative to its assets.
- Looking back over the past five years, there has been a notable decline in the debt-to-assets ratio from 0.51 in October 2019 to 0.38 in October 2023. This suggests that Greif Inc has been gradually reducing its reliance on debt financing to support its assets, which may indicate improved financial stability and lower financial risk.
Overall, the decreasing trend in the debt-to-assets ratio over the past five years suggests that Greif Inc has been managing its debt levels effectively relative to its asset base. This trend could signal positive financial management and a lower risk of financial distress, as the company has decreased its reliance on debt to finance its operations and asset expansion. However, further analysis of the company's overall financial position and the reasons behind the changes in the debt-to-assets ratio would provide a more holistic view of its financial health.