Helen of Troy Ltd (HELE)

Debt-to-capital ratio

Feb 29, 2024 Feb 28, 2023 Feb 28, 2022 Feb 28, 2021 Feb 29, 2020
Long-term debt US$ in thousands 659,421 928,348 811,332 341,746 337,421
Total stockholders’ equity US$ in thousands 1,637,440 1,488,810 1,327,340 1,239,350 1,161,720
Debt-to-capital ratio 0.29 0.38 0.38 0.22 0.23

February 29, 2024 calculation

Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $659,421K ÷ ($659,421K + $1,637,440K)
= 0.29

The debt-to-capital ratio for Helen of Troy Ltd has fluctuated over the past five years, indicating varying levels of reliance on debt to finance its operations and growth. In the most recent fiscal year as of February 29, 2024, the company's debt-to-capital ratio decreased to 0.29 from 0.38 in the previous two fiscal years. This reduction suggests that Helen of Troy Ltd has potentially paid down some debt or increased its capital base relative to debt.

Comparing the current ratio to the ratio from three years ago, we see a considerable increase in leverage as the ratio jumped from 0.22 in 2021 to 0.38 in 2023. This hike may have been driven by increased borrowing to fund strategic initiatives, acquisitions, or other expansion activities during that period.

In general, a lower debt-to-capital ratio indicates a lower financial risk and more financial stability for the company, as it relies less on debt to fund its operations. Conversely, a higher ratio may suggest higher financial risk and potentially increased interest expense burdens.

It is essential for stakeholders to monitor this ratio over time to assess the company's financial health and leverage levels to make informed investment decisions.