Harmony Biosciences Holdings (HRMY)

Debt-to-capital ratio

Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Long-term debt US$ in thousands 163,016 178,566 189,647 189,984 194,250
Total stockholders’ equity US$ in thousands 659,155 466,992 402,838 186,507 97,180
Debt-to-capital ratio 0.20 0.28 0.32 0.50 0.67

December 31, 2024 calculation

Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $163,016K ÷ ($163,016K + $659,155K)
= 0.20

The debt-to-capital ratio of Harmony Biosciences Holdings has shown a declining trend over the past five years, reflecting an improved financial position in terms of leveraging. The ratio decreased from 0.67 as of December 31, 2020, to 0.20 as of December 31, 2024. This indicates that the company has been reducing its debt relative to its total capital over the years.

A decreasing debt-to-capital ratio generally signifies a lower reliance on debt financing and a stronger capital structure. It suggests that the company may be effectively managing its debt levels and improving its financial health. Investors and creditors often view a declining debt-to-capital ratio positively, as it can indicate a lower risk of financial distress and a better capacity to meet financial obligations. Overall, Harmony Biosciences Holdings' decreasing debt-to-capital ratio reflects a positive trend in its financial stability and management of debt.