Louisiana-Pacific Corporation (LPX)
Debt-to-capital ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Long-term debt | US$ in thousands | 347,000 | 346,000 | 346,000 | 348,000 | 348,000 |
| Total stockholders’ equity | US$ in thousands | 1,557,000 | 1,433,000 | 1,235,000 | 1,234,000 | 991,000 |
| Debt-to-capital ratio | 0.18 | 0.19 | 0.22 | 0.22 | 0.26 |
December 31, 2023 calculation
Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $347,000K ÷ ($347,000K + $1,557,000K)
= 0.18
The debt-to-capital ratio of Louisiana-Pacific Corp. has shown a decreasing trend over the past five years, declining from 0.26 in 2019 to 0.18 in 2023. This indicates that the company has been able to reduce its reliance on debt as a source of financing relative to its total capital structure. A lower debt-to-capital ratio suggests a lower financial risk as the company has less debt in proportion to its total capital.
The decrease in the debt-to-capital ratio could indicate that Louisiana-Pacific Corp. has been actively managing its capital structure by paying down debt or increasing equity. This improvement in the debt ratio may reflect positively on the company's creditworthiness and financial stability, as it reduces the potential risks associated with high levels of debt.
Furthermore, a declining debt-to-capital ratio could enhance the company's ability to access financing at lower costs, as lenders typically prefer companies with lower leverage ratios. Overall, the decreasing trend in Louisiana-Pacific Corp.'s debt-to-capital ratio signals a positive development in its financial health and capital structure management.
Peer comparison
Dec 31, 2023