Hanesbrands Inc (HBI)
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 | 3,235,640 | 3,612,080 | 3,326,090 | 3,739,430 | 3,256,870 |
| Total stockholders’ equity | US$ in thousands | 419,353 | 398,264 | 702,493 | 813,958 | 1,236,600 |
| Debt-to-capital ratio | 0.89 | 0.90 | 0.83 | 0.82 | 0.72 |
December 31, 2023 calculation
Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $3,235,640K ÷ ($3,235,640K + $419,353K)
= 0.89
The debt-to-capital ratio of Hanesbrands Inc has been fluctuating over the past five years, ranging from 0.72 in 2019 to 0.90 in 2022, with a slight decrease to 0.89 in 2023. This ratio indicates the proportion of the company's capital structure financed by debt. A higher debt-to-capital ratio suggests a higher level of financial risk due to increased reliance on debt financing.
The upward trend in the ratio from 2019 to 2022 indicates an increase in the company's debt relative to its total capital during this period. However, the slight decrease in 2023 suggests a potential effort to reduce debt levels or increase equity to the capital structure.
Overall, a debt-to-capital ratio above 0.80 indicates that a significant portion of Hanesbrands Inc's capital structure is funded by debt, which may lead to higher interest payments and financial risk. Monitoring this ratio over time can help assess the company's financial leverage and its ability to meet debt obligations effectively.