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

Company name
Symbol
Debt-to-capital ratio
MP Materials Corp
MP
0.33
Cleveland-Cliffs Inc
CLF
0.28
Freeport-McMoran Copper & Gold Inc
FCX
0.34