MP Materials Corp (MP)
Debt-to-capital ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|
| Long-term debt | US$ in thousands | 681,980 | 678,444 | 674,927 | 961 |
| Total stockholders’ equity | US$ in thousands | 1,365,780 | 1,312,630 | 1,008,730 | 853,877 |
| Debt-to-capital ratio | 0.33 | 0.34 | 0.40 | 0.00 |
December 31, 2023 calculation
Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $681,980K ÷ ($681,980K + $1,365,780K)
= 0.33
The debt-to-capital ratio for MP Materials Corporation has shown a decreasing trend over the past four years, indicating a decreasing reliance on debt financing relative to total capital. In 2020, the ratio was notably low at 0.08, suggesting a conservative capital structure with minimal debt. However, the ratio increased to 0.41 in 2021, which could indicate a significant increase in debt relative to capital that year.
The ratio decreased to 0.34 in 2022 and further to 0.33 in 2023, signaling a positive trend towards a more balanced mix of debt and equity in the company's capital structure. This decreasing trend may imply improved financial stability and reduced financial risk associated with debt, which could enhance the company's ability to weather economic downturns or fund future growth opportunities. Overall, the company's debt-to-capital ratio indicates a generally healthy and improving balance between debt and equity financing over the past four years.
Peer comparison
Dec 31, 2023