KBR Inc (KBR)
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 | 1,801,000 | 1,376,000 | 1,875,000 | 1,584,000 | 1,183,000 |
| Total stockholders’ equity | US$ in thousands | 1,383,000 | 1,620,000 | 1,669,000 | 1,580,000 | 1,839,000 |
| Debt-to-equity ratio | 1.30 | 0.85 | 1.12 | 1.00 | 0.64 |
December 31, 2023 calculation
Debt-to-equity ratio = Long-term debt ÷ Total stockholders’ equity
= $1,801,000K ÷ $1,383,000K
= 1.30
The debt-to-equity ratio of KBR Inc has exhibited fluctuations over the past five years, ranging from 0.64 in 2019 to 1.30 in 2023. This ratio indicates the proportion of debt financing relative to equity financing utilized by the company. A higher ratio suggests a higher level of debt compared to equity, which may indicate higher financial risk and leverage.
In 2019, the company had a relatively low debt-to-equity ratio of 0.64, suggesting a conservative capital structure with less reliance on debt financing. However, this ratio increased in subsequent years, reaching 1.30 in 2023, indicating a significant shift towards more debt financing relative to equity.
The rise in the debt-to-equity ratio could be a strategic decision by KBR Inc to fund expansion or investments through debt, taking advantage of potentially lower interest rates. However, a high debt-to-equity ratio also implies a higher financial risk, as the company may face challenges in servicing its debt obligations, especially in times of economic uncertainty or downturns.
Overall, the trend in KBR Inc's debt-to-equity ratio indicates a shifting capital structure with increasing reliance on debt financing in recent years. This may warrant further analysis to understand the impact of this trend on the company's financial stability and long-term sustainability.
Peer comparison
Dec 31, 2023