Littelfuse Inc (LFUS)
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 | 857,915 | 866,623 | 611,897 | 687,034 | 669,158 |
| Total stockholders’ equity | US$ in thousands | 2,480,170 | 2,211,190 | 1,893,390 | 1,608,640 | 1,495,880 |
| Debt-to-equity ratio | 0.35 | 0.39 | 0.32 | 0.43 | 0.45 |
December 31, 2023 calculation
Debt-to-equity ratio = Long-term debt ÷ Total stockholders’ equity
= $857,915K ÷ $2,480,170K
= 0.35
The debt-to-equity ratio of Littelfuse Inc has shown a declining trend from 2019 to 2023, indicating an improvement in the company's capital structure and financial leverage. The ratio decreased from 0.45 in 2019 to 0.35 in 2023, suggesting a reduction in the level of debt relative to equity over the years.
A lower debt-to-equity ratio generally signifies that a company is relying less on debt financing and is funding its operations more through equity. This can be seen as a positive indicator of financial stability and solvency, as the company has a lower level of financial risk associated with its debt obligations.
The decreasing trend in the debt-to-equity ratio of Littelfuse Inc may reflect effective debt management strategies, such as debt repayment or a slower accumulation of new debt. It also indicates that the company's equity base has been growing at a relatively faster pace compared to its debt, which could be a result of profitable operations or successful equity financing activities.
Overall, the declining debt-to-equity ratio of Littelfuse Inc over the years suggests a strengthening financial position and improved risk profile, which may enhance investor confidence and creditworthiness in the eyes of lenders.
Peer comparison
Dec 31, 2023