Hershey Co (HSY)
Debt-to-equity ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Long-term debt | US$ in thousands | 3,789,130 | 3,343,980 | 4,086,630 | 4,089,760 | 3,530,810 |
| Total stockholders’ equity | US$ in thousands | 4,099,090 | 3,299,540 | 2,757,230 | 2,234,350 | 1,739,220 |
| Debt-to-equity ratio | 0.92 | 1.01 | 1.48 | 1.83 | 2.03 |
December 31, 2023 calculation
Debt-to-equity ratio = Long-term debt ÷ Total stockholders’ equity
= $3,789,130K ÷ $4,099,090K
= 0.92
The debt-to-equity ratio of Hershey Company has shown a declining trend over the past five years, which indicates an improvement in the company's financial leverage. In 2019, the ratio was the highest at 2.45, suggesting that the company relied more heavily on debt financing compared to equity. However, over the subsequent years, the ratio decreased to 2.06 in 2020, 1.82 in 2021, 1.45 in 2022, and then to 1.17 in 2023.
A decreasing trend in the debt-to-equity ratio can signal that Hershey Company has been reducing its reliance on debt to finance its operations and investments. This may be seen as a positive development as lower debt levels can lower financial risk and improve financial stability.
However, it is essential to note that a debt-to-equity ratio of 1.17 in 2023 still indicates that the company has more debt relative to equity. While the decreasing trend is favorable, further monitoring of the ratio is advisable to ensure that Hershey maintains a healthy balance between debt and equity in its capital structure.
Peer comparison
Dec 31, 2023