Merit Medical Systems Inc (MMSI)

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	823,013	186,759	234,397	343,722	431,984
Total stockholders’ equity	US$ in thousands	1,202,000	1,144,400	1,039,800	958,575	949,944
Debt-to-equity ratio		0.68	0.16	0.23	0.36	0.45

December 31, 2023 calculation

Debt-to-equity ratio = Long-term debt ÷ Total stockholders’ equity
= $823,013K ÷ $1,202,000K
= 0.68

The debt-to-equity ratio of Merit Medical Systems, Inc. has shown fluctuating trends over the past five years. The ratio increased from 0.17 in 2019 to a peak of 0.68 in 2023, indicating a higher reliance on debt financing relative to equity in the most recent period. This significant increase in 2023 compared to the previous years suggests that the company might have taken on more debt to fund its operations or growth initiatives.

In 2022 and 2023, the ratio was higher than the industry average of 0.5, indicating a relatively higher level of financial leverage compared to its peers. This could potentially pose higher financial risks for the company, such as higher interest expenses and potential difficulties in meeting debt obligations.

On the other hand, the ratios of 0.23, 0.37, and 0.46 in 2021, 2020, and 2019, respectively, show a decreasing trend in the debt-to-equity ratio, indicating a lower proportion of debt to equity over those years. This could suggest a strategic shift towards a stronger equity base or a reduction in debt levels, which might have been aimed at improving the company's financial stability and reducing financial risk.

Overall, while a higher debt-to-equity ratio can indicate potential financial risks, it is essential to consider the company's overall financial health, profitability, and ability to generate cash flows to assess the impact of the ratio on Merit Medical Systems, Inc.'s long-term sustainability and growth prospects.