WW Grainger Inc (GWW)
Debt-to-assets ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Long-term debt | US$ in thousands | 2,266,000 | 2,284,000 | 2,362,000 | 2,389,000 | 1,914,000 |
| Total assets | US$ in thousands | 8,147,000 | 7,588,000 | 6,592,000 | 6,295,000 | 6,005,000 |
| Debt-to-assets ratio | 0.28 | 0.30 | 0.36 | 0.38 | 0.32 |
December 31, 2023 calculation
Debt-to-assets ratio = Long-term debt ÷ Total assets
= $2,266,000K ÷ $8,147,000K
= 0.28
W.W. Grainger Inc.'s debt-to-assets ratio has shown a downward trend over the past five years, indicating improvements in the company's financial leverage and ability to cover its debt obligations with its assets. The ratio decreased from 0.37 in 2019 to 0.28 in 2023. This suggests that Grainger has been relying less on debt financing relative to its total assets, which can be seen as a positive sign of financial health and stability.
A lower debt-to-assets ratio generally indicates less financial risk and a greater capacity to weather economic downturns or unexpected challenges. It also implies that the company has a stronger asset base relative to its debt obligations, which can provide a sense of security to investors and creditors.
Overall, the decreasing trend in Grainger's debt-to-assets ratio signals prudent financial management and a more conservative approach to leveraging debt, which could enhance the company's long-term sustainability and competitiveness in the market.