Masco Corporation (MAS)
Debt-to-capital ratio
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Long-term debt | US$ in thousands | 2,945,000 | 2,945,000 | 2,946,000 | 2,949,000 | 2,792,000 |
| Total stockholders’ equity | US$ in thousands | -279,000 | -126,000 | -480,000 | -179,000 | 195,000 |
| Debt-to-capital ratio | 1.10 | 1.04 | 1.19 | 1.06 | 0.93 |
December 31, 2024 calculation
Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $2,945,000K ÷ ($2,945,000K + $-279,000K)
= 1.10
Masco Corporation's debt-to-capital ratio has exhibited an increasing trend over the years, rising from 0.93 as of December 31, 2020, to 1.06 as of December 31, 2021, further increasing to 1.19 by December 31, 2022. Subsequently, there was a slight decrease to 1.04 as of December 31, 2023, followed by a slight uptick to 1.10 by December 31, 2024.
The increasing trend in the debt-to-capital ratio indicates that Masco Corporation has been relying more on debt financing relative to its capital structure. This can have both positive and negative implications. On the positive side, using debt can provide tax advantages and potentially boost returns on equity. However, high levels of debt also bring increased financial risk, as higher interest payments could impact profitability and financial flexibility.
It would be crucial for Masco Corporation to carefully manage its debt levels and ensure that it maintains a healthy balance between debt and equity financing to sustain long-term financial stability and growth. Monitoring fluctuations in the debt-to-capital ratio can provide insights into the company's financial health and leverage position.
Peer comparison
Dec 31, 2024