Kennametal Inc (KMT)
Debt-to-capital ratio
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | ||
|---|---|---|---|---|---|---|
| Long-term debt | US$ in thousands | 545,900 | 527,400 | 536,100 | 644,200 | 630,200 |
| Total stockholders’ equity | US$ in thousands | 1,249,880 | 1,275,450 | 1,252,580 | 1,329,610 | 1,229,880 |
| Debt-to-capital ratio | 0.30 | 0.29 | 0.30 | 0.33 | 0.34 |
June 30, 2024 calculation
Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $545,900K ÷ ($545,900K + $1,249,880K)
= 0.30
The debt-to-capital ratio of Kennametal Inc has shown a slight fluctuation over the past five years, ranging from 0.29 to 0.34. The ratio indicates the proportion of the company's capital that is financed through debt, with the remaining portion being contributed by equity.
In the latest fiscal year ending June 30, 2024, the debt-to-capital ratio was 0.30, which suggests that around 30% of the company's capital structure is funded by debt. This indicates a relatively conservative approach to leveraging, as a lower ratio implies a lower financial risk due to lower reliance on debt financing.
The trend of the debt-to-capital ratio decreasing from 0.34 in June 2020 to 0.30 in June 2024 might indicate a prudent management strategy in reducing debt levels relative to total capital over the years. However, it's important to analyze the absolute levels of both debt and equity to gain a deeper understanding of the company's capital structure and financial health.