NeoGenomics Inc (NEO)
Debt-to-capital ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Long-term debt | US$ in thousands | 538,198 | 535,322 | 532,483 | 168,120 | 91,829 |
| Total stockholders’ equity | US$ in thousands | 941,537 | 998,023 | 1,108,280 | 694,294 | 507,408 |
| Debt-to-capital ratio | 0.36 | 0.35 | 0.32 | 0.19 | 0.15 |
December 31, 2023 calculation
Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $538,198K ÷ ($538,198K + $941,537K)
= 0.36
The debt-to-capital ratio of Neogenomics Inc. has displayed an increasing trend over the past five years, standing at 0.36 in 2023 compared to 0.35 in 2022, 0.33 in 2021, 0.20 in 2020, and 0.17 in 2019. This indicates that the company's reliance on debt to finance its operations and growth has been gradually rising. The higher debt-to-capital ratio suggests a greater proportion of the company's capital structure is financed by debt rather than equity.
While a higher debt-to-capital ratio can potentially enhance returns for shareholders through leveraging, it also heightens financial risk due to increased interest payments and principal repayment obligations. Investors and creditors may monitor this ratio closely as excessive leverage could lead to financial distress if the company encounters challenges in servicing its debt obligations, especially in economic downturns or adverse business conditions.
It is essential for Neogenomics Inc. to maintain a balance in its capital structure to ensure financial stability and sustainability in the long term. The company may need to carefully manage its debt levels, monitor debt covenants, and assess refinancing options to optimize its capital structure and mitigate risks associated with high debt levels.