Granite Construction Incorporated (GVA)
Debt-to-capital ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Long-term debt | US$ in thousands | 614,781 | 286,934 | 331,191 | 330,522 | 356,108 |
| Total stockholders’ equity | US$ in thousands | 977,298 | 953,016 | 967,682 | 975,664 | 1,141,470 |
| Debt-to-capital ratio | 0.39 | 0.23 | 0.25 | 0.25 | 0.24 |
December 31, 2023 calculation
Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $614,781K ÷ ($614,781K + $977,298K)
= 0.39
The debt-to-capital ratio of Granite Construction Inc. has gradually increased over the past five years. In 2019, the ratio was 0.24, indicating that 24% of the company's capital was financed by debt. Subsequently, the ratio increased to 0.26 in both 2020 and 2021, before showing a significant jump to 0.40 in 2023.
This upward trend in the debt-to-capital ratio suggests that Granite Construction Inc. has been relying more on debt to finance its operations and investment activities. A higher debt-to-capital ratio may indicate increased financial leverage and potential financial risk, as the company is more reliant on borrowed funds.
It is recommended for stakeholders and investors to closely monitor the company's debt levels and consider the implications of higher debt financing on Granite Construction Inc.'s financial stability and future growth prospects.
Peer comparison
Dec 31, 2023