HealthEquity Inc (HQY)

Debt-to-capital ratio

		Jan 31, 2024	Jan 31, 2023	Jan 31, 2022	Jan 31, 2021	Jan 31, 2020
Long-term debt	US$ in thousands	874,972	907,838	922,077	924,217	1,181,620
Total stockholders’ equity	US$ in thousands	2,035,020	1,895,640	1,852,580	1,378,730	1,030,300
Debt-to-capital ratio		0.30	0.32	0.33	0.40	0.53

January 31, 2024 calculation

Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $874,972K ÷ ($874,972K + $2,035,020K)
= 0.30

The debt-to-capital ratio of HealthEquity Inc has shown a consistent decline over the past five years, indicating a favorable trend in the company's debt management. The ratio decreased from 0.53 in January 2020 to 0.30 in January 2024, reflecting a significant reduction in the proportion of debt used to finance the company's operations relative to its total capital.

This improvement suggests that HealthEquity Inc has been reducing its reliance on debt financing in favor of other sources of capital, such as equity. A lower debt-to-capital ratio is generally perceived positively by investors and creditors, as it indicates a lower risk of financial distress and a stronger financial position.

Overall, the decreasing trend in the debt-to-capital ratio of HealthEquity Inc signals a more conservative approach to leverage and a healthier balance between debt and equity in the company's capital structure over the past five years.