Griffon Corporation (GFF)
Debt-to-capital 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 stockholders’ equity | US$ in thousands | 224,888 | 315,244 | 477,570 | 807,158 | 700,151 |
| Debt-to-capital ratio | 0.87 | 0.82 | 0.77 | 0.56 | 0.60 |
September 30, 2024 calculation
Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $1,515,900K ÷ ($1,515,900K + $224,888K)
= 0.87
The debt-to-capital ratio of Griffon Corporation has shown an increasing trend over the past five years. The ratio stood at 0.60 in 2020, then increased to 0.56 in 2021, further increasing to 0.77 in 2022, then to 0.82 in 2023, and finally to 0.87 in 2024. This suggests that the company has been relying more on debt to finance its operations and growth compared to its capital structure. A higher debt-to-capital ratio indicates a higher financial risk for the company as it implies a larger proportion of debt in its capital structure. It is essential for Griffon Corporation to carefully manage its debt levels to ensure financial stability and avoid potential liquidity issues in the future.