HNI Corp (HNI)
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 | 428,300 | 188,800 | 174,600 | 174,524 | 174,439 |
| Total stockholders’ equity | US$ in thousands | 761,400 | 616,500 | 589,600 | 590,419 | 584,044 |
| Debt-to-capital ratio | 0.36 | 0.23 | 0.23 | 0.23 | 0.23 |
December 31, 2023 calculation
Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $428,300K ÷ ($428,300K + $761,400K)
= 0.36
The debt-to-capital ratio of HNI Corp has shown a notable increase from 0.23 in the years 2019, 2020, and 2021 to 0.36 as of December 31, 2023. This suggests that the company's reliance on debt as a portion of its capital structure has increased over the years, indicating a higher level of financial leverage. A higher debt-to-capital ratio may imply that the company is taking on more debt to finance its operations, acquisitions, or capital expenditures.
It is important to note that a higher debt-to-capital ratio can potentially lead to increased financial risk, as the company may have higher interest payments and debt obligations to fulfill. Investors and creditors typically monitor this ratio closely to assess the company's solvency and financial health. Therefore, HNI Corp's increasing debt-to-capital ratio may warrant further scrutiny to understand the reasons behind the change and assess the company's ability to manage its debt levels effectively.