McCormick & Company Incorporated (MKC)
Debt-to-capital ratio
| Nov 30, 2023 | Nov 30, 2022 | Nov 30, 2021 | Nov 30, 2020 | Nov 30, 2019 | ||
|---|---|---|---|---|---|---|
| Long-term debt | US$ in thousands | 3,339,900 | 3,642,300 | 3,973,300 | 3,753,800 | 3,625,800 |
| Total stockholders’ equity | US$ in thousands | 5,060,700 | 4,680,500 | 4,411,000 | 3,926,100 | 3,444,200 |
| Debt-to-capital ratio | 0.40 | 0.44 | 0.47 | 0.49 | 0.51 |
November 30, 2023 calculation
Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $3,339,900K ÷ ($3,339,900K + $5,060,700K)
= 0.40
The debt-to-capital ratio of McCormick & Co., Inc. has exhibited a declining trend over the past five years, decreasing from 0.56 in 2019 to 0.47 in 2023. This trend suggests an improvement in the company's financial leverage and capital structure. A lower debt-to-capital ratio indicates that the company is relying less on debt financing and has a larger portion of its capital funded by equity. This could be viewed positively by investors and creditors as it reduces the company's financial risk. However, it is important to note that a low debt-to-capital ratio may also limit the company's financial flexibility and access to potential tax benefits associated with debt financing. Overall, the decreasing trend in the debt-to-capital ratio reflects a more conservative approach to capital structure and may indicate enhanced financial stability for McCormick & Co., Inc.