International Paper (IP)
Debt-to-capital ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Long-term debt | US$ in thousands | 5,455,000 | 4,816,000 | 5,383,000 | 8,042,000 | 9,597,000 |
| Total stockholders’ equity | US$ in thousands | 8,355,000 | 8,497,000 | 9,082,000 | 7,854,000 | 7,713,000 |
| Debt-to-capital ratio | 0.40 | 0.36 | 0.37 | 0.51 | 0.55 |
December 31, 2023 calculation
Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $5,455,000K ÷ ($5,455,000K + $8,355,000K)
= 0.40
The debt-to-capital ratio of International Paper Co. has shown a decreasing trend from 0.64 in 2019 to 0.48 in 2023. This ratio indicates the proportion of the company's capital that is financed by debt, with the remainder financed by equity.
A decreasing trend in the debt-to-capital ratio suggests that International Paper Co. has been reducing its reliance on debt financing over the years relative to its total capital structure. This can be seen as a positive sign as lower levels of debt may indicate lower financial risk and potentially more financial stability for the company.
However, it is important to note that the debt-to-capital ratio of 0.48 in 2023 still indicates that nearly half of International Paper Co.'s capital is funded by debt. Analysts and investors may continue to monitor this ratio to ensure that the company maintains a healthy balance between debt and equity financing to support its operations and growth while managing financial risk effectively.
Peer comparison
Dec 31, 2023