Genuine Parts Co (GPC)
Debt-to-equity ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Long-term debt | US$ in thousands | 3,550,930 | 3,076,790 | 2,409,360 | 2,516,610 | 2,802,060 |
| Total stockholders’ equity | US$ in thousands | 4,401,050 | 3,790,360 | 3,490,740 | 3,204,800 | 3,674,710 |
| Debt-to-equity ratio | 0.81 | 0.81 | 0.69 | 0.79 | 0.76 |
December 31, 2023 calculation
Debt-to-equity ratio = Long-term debt ÷ Total stockholders’ equity
= $3,550,930K ÷ $4,401,050K
= 0.81
The debt-to-equity ratio of Genuine Parts Co. has shown some fluctuation over the past five years. The ratio was 0.93 in 2019, decreased to 0.84 in 2020, increased to 0.69 in 2021, further increased to 0.88 in 2022, and finally rose to 0.89 in 2023.
In 2021, the company had a lower debt-to-equity ratio, indicating a relatively lower level of debt compared to equity in its capital structure. This suggests that the company may have been relying more on equity financing rather than debt financing during that year.
However, the ratio increased in 2022 and 2023, indicating an increase in the proportion of debt relative to equity. This could signify that Genuine Parts Co. has taken on more debt to finance its operations or investments, potentially increasing its financial risk.
Although the ratio fluctuated, it has generally remained below 1, indicating that the company has more equity than debt in its capital structure, which can be considered a positive sign of financial health and stability. Nonetheless, monitoring trends in the debt-to-equity ratio over time can provide valuable insights into the company's financial leverage and risk management strategies.