Griffon Corporation (GFF)
Debt-to-equity 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-equity ratio | 6.74 | 4.63 | 3.27 | 1.28 | 1.48 |
September 30, 2024 calculation
Debt-to-equity ratio = Long-term debt ÷ Total stockholders’ equity
= $1,515,900K ÷ $224,888K
= 6.74
The debt-to-equity ratio of Griffon Corporation has been increasing steadily over the past five years, indicating a growing level of financial leverage. In 2020, the ratio was relatively stable at 1.48, but it has since experienced significant growth, reaching 6.74 by September 30, 2024. This suggests that Griffon Corporation has been relying more on debt financing compared to equity financing in recent years.
A higher debt-to-equity ratio can be a cause for concern as it may indicate increased financial risk and a higher dependency on debt to fund operations or growth. It suggests that the company may have higher debt obligations relative to its equity, which can potentially lead to financial distress if not managed effectively.
Investors and creditors may closely monitor Griffon Corporation's debt-to-equity ratio to assess its financial health and risk profile. It is essential for the company to carefully manage its debt levels and ensure a balanced capital structure to maintain solvency and profitability in the long run.