International Business Machines (IBM)
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 | 49,884,000 | 50,121,000 | 46,189,000 | 44,917,000 | 54,217,000 |
| Total stockholders’ equity | US$ in thousands | 27,307,000 | 22,533,000 | 21,944,000 | 18,901,000 | 20,597,000 |
| Debt-to-capital ratio | 0.65 | 0.69 | 0.68 | 0.70 | 0.72 |
December 31, 2024 calculation
Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $49,884,000K ÷ ($49,884,000K + $27,307,000K)
= 0.65
The debt-to-capital ratio of International Business Machines has shown a decreasing trend over the past five years. As of December 31, 2020, the ratio stood at 0.72, indicating that 72% of the company's capital was financed by debt. Subsequently, the ratio decreased to 0.70 by December 31, 2021, and continued to decline to 0.68 by December 31, 2022. By the end of December 31, 2023, the ratio slightly increased to 0.69 before decreasing again to 0.65 by December 31, 2024.
A decreasing debt-to-capital ratio often suggests that the company is reducing its reliance on debt financing in comparison to its equity. This may indicate a stronger financial position, lower financial risk, and potentially improved creditworthiness. However, it could also signify a slower rate of growth or limited access to debt capital for future investments.
Overall, the declining trend in International Business Machines' debt-to-capital ratio over the past five years reflects a strategic shift towards a more balanced capital structure with decreasing debt levels relative to its total capital.
Peer comparison
Dec 31, 2024