Kaiser Aluminum Corporation (KALU)
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 | 1,039,800 | 1,038,100 | 1,036,300 | 838,100 | 492,600 |
| Total stockholders’ equity | US$ in thousands | 652,200 | 631,200 | 692,500 | 732,400 | 733,900 |
| Debt-to-equity ratio | 1.59 | 1.64 | 1.50 | 1.14 | 0.67 |
December 31, 2023 calculation
Debt-to-equity ratio = Long-term debt ÷ Total stockholders’ equity
= $1,039,800K ÷ $652,200K
= 1.59
Based on the data provided, Kaiser Aluminum Corp's debt-to-equity ratio has been fluctuating over the past five years. The ratio was highest in 2022 at 1.64 and lowest in 2019 at 0.67. In 2023, the ratio decreased slightly to 1.60 compared to the previous year.
A debt-to-equity ratio above 1 indicates that the company relies more on debt financing than equity financing to fund its operations and growth. A higher ratio suggests a higher financial risk due to increased debt levels, potentially leading to higher interest expenses and lower financial flexibility.
Kaiser Aluminum's increasing debt-to-equity ratio trend from 2019 to 2022 may signal a more aggressive debt financing strategy during these years. However, the decrease in the ratio in 2023 could signify a potential effort to reduce debt levels or increase equity in the capital structure.
It is essential to closely monitor Kaiser Aluminum's debt-to-equity ratio in the future to assess the company's financial risk, debt management, and overall financial health. A sustainable balance between debt and equity is crucial for long-term stability and growth.
Peer comparison
Dec 31, 2023