MSC Industrial Direct Company Inc (MSM)
Debt-to-equity ratio
| Sep 2, 2023 | Sep 3, 2022 | Aug 28, 2021 | Aug 29, 2020 | Aug 31, 2019 | ||
|---|---|---|---|---|---|---|
| Long-term debt | US$ in thousands | 224,165 | 468,728 | 582,428 | 494,565 | 264,225 |
| Total stockholders’ equity | US$ in thousands | 1,479,160 | 1,350,430 | 1,150,870 | 1,314,940 | 1,478,550 |
| Debt-to-equity ratio | 0.15 | 0.35 | 0.51 | 0.38 | 0.18 |
September 2, 2023 calculation
Debt-to-equity ratio = Long-term debt ÷ Total stockholders’ equity
= $224,165K ÷ $1,479,160K
= 0.15
The debt-to-equity ratio measures the relationship between a company's total debt and its shareholder equity, indicating the extent to which a company is financed by debt. The trend of MSC Industrial Direct Co., Inc.'s debt-to-equity ratio over the past five years reflects the company's capital structure and its ability to manage debt.
In the fiscal year ending September 2, 2023, the debt-to-equity ratio for MSC Industrial Direct Co., Inc. improved significantly to 0.31 from 0.59 in the previous year. This substantial decrease suggests that the company relied less on debt and more on equity to finance its operations, which can indicate a stronger financial position and reduced financial risk.
Looking back at the fiscal years ending September 3, 2022, and August 28, 2021, the company's debt-to-equity ratio increased to 0.59 and 0.68, respectively. These rises indicated a higher reliance on debt financing in comparison to equity, signaling potential financial risk and a relatively weaker position in terms of solvency and debt management.
In the fiscal year ending August 29, 2020, the company's debt-to-equity ratio decreased to 0.47 from 0.68 in the previous year, which implies a decreased reliance on debt financing and a relatively stronger financial position.
Furthermore, in the fiscal year ending August 31, 2019, the debt-to-equity ratio remained stable at 0.30, indicating a consistent and balanced capital structure during that period.
Overall, the trend in MSC Industrial Direct Co., Inc.'s debt-to-equity ratio demonstrates fluctuations in the company's capital structure and its approach to financing. The recent decrease in the ratio suggests that the company has shifted towards a more equity-funded structure, possibly indicating a stronger financial position and reduced financial risk. However, it is important to consider other financial metrics and external factors to gain a comprehensive understanding of the company's financial health and risk profile.
Peer comparison
Sep 2, 2023