Howmet Aerospace Inc (HWM)
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 | 3,500,000 | 4,162,000 | 4,227,000 | 4,699,000 | 4,906,000 |
| Total stockholders’ equity | US$ in thousands | 4,037,000 | 3,601,000 | 3,508,000 | 3,577,000 | 4,591,000 |
| Debt-to-equity ratio | 0.87 | 1.16 | 1.20 | 1.31 | 1.07 |
December 31, 2023 calculation
Debt-to-equity ratio = Long-term debt ÷ Total stockholders’ equity
= $3,500,000K ÷ $4,037,000K
= 0.87
The debt-to-equity ratio of Howmet Aerospace Inc has exhibited a fluctuating trend over the past five years. The ratio decreased from 1.29 in 2019 to 1.16 in 2022 before slightly increasing to 1.21 in 2021. However, in 2023, there was a notable decrease to 0.92, indicating a significant improvement in the company's leverage position.
A debt-to-equity ratio of 0.92 in 2023 suggests that Howmet Aerospace relies more on equity financing rather than debt to support its operations and growth. This could imply a decreased financial risk as the company has lower debt obligations compared to its equity base.
The downward trend in the debt-to-equity ratio indicates a potential strengthening of the company's financial position and a reduction in the level of financial leverage. This could be perceived positively by investors and creditors, as a lower ratio signifies a healthier balance sheet and less financial risk.
It is important for stakeholders to continue monitoring Howmet Aerospace's debt-to-equity ratio to ensure that the company maintains a sustainable capital structure and effectively manages its debt levels relative to equity.
Peer comparison
Dec 31, 2023