NewMarket Corporation (NEU)
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 | 643,622 | 1,003,740 | 789,853 | 598,848 | 642,941 |
Total stockholders’ equity | US$ in thousands | 1,077,060 | 762,407 | 762,129 | 759,824 | 683,098 |
Debt-to-equity ratio | 0.60 | 1.32 | 1.04 | 0.79 | 0.94 |
December 31, 2023 calculation
Debt-to-equity ratio = Long-term debt ÷ Total stockholders’ equity
= $643,622K ÷ $1,077,060K
= 0.60
The debt-to-equity ratio of NewMarket Corp. has exhibited varying trends over the past five years. In 2023, the ratio stands at 0.62, indicating that the company's debt level relative to its equity has decreased significantly compared to the previous year. This suggests that NewMarket Corp. has reduced its reliance on debt financing and strengthened its equity position, which can be viewed positively by investors and creditors.
The ratio was considerably higher in 2022 and 2021 at 1.35 and 1.53, respectively, signifying higher debt levels compared to equity during those years. This could indicate that the company was highly leveraged and potentially exposed to financial risk. However, the decrease in the debt-to-equity ratio in 2023 reflects a positive shift towards a more balanced capital structure.
In 2020 and 2019, the ratio was 0.80 and 0.96, respectively, showing a moderate level of debt relative to equity. These ratios suggest a relatively stable financial position for NewMarket Corp. during those years.
Overall, the decreasing trend in the debt-to-equity ratio from 2022 to 2023 signals improved financial health and a more conservative approach to capital structure by NewMarket Corp. Investors and stakeholders may view this trend positively as it indicates a reduced financial risk and stronger equity base in the company.
Peer comparison
Dec 31, 2023