Helmerich and Payne Inc (HP)
Debt-to-capital ratio
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | ||
|---|---|---|---|---|---|---|
| Long-term debt | US$ in thousands | 1,782,180 | 545,144 | 542,610 | 541,997 | 480,727 |
| Total stockholders’ equity | US$ in thousands | 2,917,150 | 2,771,940 | 2,765,470 | 2,912,620 | 3,318,510 |
| Debt-to-capital ratio | 0.38 | 0.16 | 0.16 | 0.16 | 0.13 |
September 30, 2024 calculation
Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $1,782,180K ÷ ($1,782,180K + $2,917,150K)
= 0.38
The debt-to-capital ratio of Helmerich and Payne Inc has shown an increasing trend over the past five years. As of September 30, 2020, the ratio was 0.13, which then increased to 0.16 for the subsequent three years, and further rose to 0.38 as of September 30, 2024. This indicates a significant shift towards a higher level of debt relative to the company's capital structure.
A higher debt-to-capital ratio suggests that a larger portion of the company's capital is being funded by debt rather than equity. While debt can be a cost-effective way to finance operations and growth, it also exposes the company to higher financial risk, particularly in times of economic downturn or rising interest rates.
It is essential for investors and stakeholders to closely monitor this ratio to assess the financial risk profile of Helmerich and Payne Inc and its ability to meet its debt obligations. Additionally, management should consider strategies to manage and potentially reduce the debt-to-capital ratio to maintain a healthy balance between debt and equity in the company's capital structure.
Peer comparison
Sep 30, 2024