Griffon Corporation (GFF)
Debt-to-assets ratio
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | ||
|---|---|---|---|---|---|---|
| Long-term debt | US$ in thousands | 1,515,900 | 1,459,900 | 1,561,000 | 1,033,200 | 1,037,040 |
| Total assets | US$ in thousands | 2,370,950 | 2,418,880 | 2,816,470 | 2,604,680 | 2,448,590 |
| Debt-to-assets ratio | 0.64 | 0.60 | 0.55 | 0.40 | 0.42 |
September 30, 2024 calculation
Debt-to-assets ratio = Long-term debt ÷ Total assets
= $1,515,900K ÷ $2,370,950K
= 0.64
Griffon Corporation's debt-to-assets ratio has experienced an increasing trend over the past five years. In 2020, the ratio stood at 0.42 and has since risen steadily to 0.64 in 2024. This suggests that the company's level of debt relative to its total assets has been growing over the years, indicating a higher degree of leverage.
A higher debt-to-assets ratio may indicate that Griffon Corporation relies more on debt financing to fund its operations and investments. While debt can be a cost-effective way to raise capital, it also increases financial risk, as the company has to meet interest payments and repay the principal amount of the debt. Consequently, investors and creditors may view a higher debt-to-assets ratio as a signal of increased financial risk and potential vulnerability in case of economic downturns or disruptions.
It is essential for Griffon Corporation to carefully manage its debt levels and ensure that it can comfortably service its debt obligations. Monitoring the trend of the debt-to-assets ratio over time can provide valuable insights into the company's financial health and its ability to sustain growth while effectively managing its debt burden.