Lindsay Corporation (LNN)
Debt-to-assets ratio
| Aug 31, 2023 | Aug 31, 2022 | Aug 31, 2021 | Aug 31, 2020 | Aug 31, 2019 | ||
|---|---|---|---|---|---|---|
| Long-term debt | US$ in thousands | 115,164 | 115,341 | 115,514 | 115,682 | 115,846 |
| Total assets | US$ in thousands | 745,660 | 710,653 | 637,185 | 570,526 | 500,314 |
| Debt-to-assets ratio | 0.15 | 0.16 | 0.18 | 0.20 | 0.23 |
August 31, 2023 calculation
Debt-to-assets ratio = Long-term debt ÷ Total assets
= $115,164K ÷ $745,660K
= 0.15
Lindsay Corporation's debt-to-assets ratio has decreased from 0.23 in 2019 to 0.15 in 2023. This indicates that the company has been successful in managing its debt relative to its assets over the past five years.
A lower debt-to-assets ratio is generally considered favorable as it suggests the company has less reliance on debt to finance its operations and has a stronger capacity to meet its financial obligations. The decreasing trend in Lindsay Corporation's debt-to-assets ratio indicates an improved financial position and potentially lower financial risk.
The declining ratio could be attributed to various factors, such as effective debt management, increased asset base, or a combination of both. It is important to note that a low debt-to-assets ratio can also suggest underutilization of debt financing, which may limit the company's growth opportunities.
Overall, the decreasing trend in Lindsay Corporation's debt-to-assets ratio reflects positively on the company's financial health and its ability to effectively manage its capital structure. However, it is also essential to consider the optimal balance between debt and equity financing to support the company's growth and strategic initiatives.
Peer comparison
Aug 31, 2023