WW Grainger Inc (GWW)
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 | 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-equity ratio | 0.73 | 0.94 | 1.26 | 1.31 | 1.03 |
December 31, 2023 calculation
Debt-to-equity ratio = Long-term debt ÷ Total stockholders’ equity
= $2,266,000K ÷ $3,115,000K
= 0.73
The debt-to-equity 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 and investments relative to equity.
In 2023, the debt-to-equity ratio stands at 0.74, demonstrating that the company has a lower level of debt in comparison to equity. This could imply a stronger financial position and lower financial risk for the company.
The decreasing trend from 2020 to 2023 suggests that management has been actively managing the company's capital structure by either paying down debt or increasing equity through retained earnings or equity issuance.
Overall, a lower debt-to-equity ratio signifies a healthier balance sheet and financial stability for W.W. Grainger Inc., providing a favorable indication to investors and creditors.