WW Grainger Inc (GWW)
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 | 2,266,000 | 2,284,000 | 2,362,000 | 2,389,000 | 1,914,000 |
| Total stockholders’ equity | US$ in thousands | 3,115,000 | 2,440,000 | 1,874,000 | 1,828,000 | 1,855,000 |
| Debt-to-capital ratio | 0.42 | 0.48 | 0.56 | 0.57 | 0.51 |
December 31, 2023 calculation
Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $2,266,000K ÷ ($2,266,000K + $3,115,000K)
= 0.42
The debt-to-capital ratio of W.W. Grainger Inc. has shown a declining trend over the past five years, indicating a decreasing reliance on debt to finance its operations relative to its total capital structure. In 2023, the ratio decreased to 0.42 from 0.49 in 2022, which suggests improved financial health and a more conservative approach to debt management. This reduction in the ratio may signify a lower level of financial risk and greater stability in the company's capital structure. It is important to note that a lower debt-to-capital ratio indicates that a smaller portion of the company's capital is derived from debt, reflecting a potentially lower financial leverage and lower interest payment obligations. Investors and stakeholders may view this trend positively as it indicates a more balanced capital structure and a healthier financial position for W.W. Grainger Inc.