NetApp Inc (NTAP)
Debt-to-equity ratio
| Apr 26, 2024 | Apr 28, 2023 | Apr 29, 2022 | Apr 30, 2021 | Apr 24, 2020 | ||
|---|---|---|---|---|---|---|
| Long-term debt | US$ in thousands | 1,992,000 | 2,389,000 | 2,386,000 | 2,632,000 | 1,146,000 |
| Total stockholders’ equity | US$ in thousands | 1,146,000 | 1,159,000 | 838,000 | 685,000 | 242,000 |
| Debt-to-equity ratio | 1.74 | 2.06 | 2.85 | 3.84 | 4.74 |
April 26, 2024 calculation
Debt-to-equity ratio = Long-term debt ÷ Total stockholders’ equity
= $1,992,000K ÷ $1,146,000K
= 1.74
The debt-to-equity ratio of NetApp Inc has shown a declining trend over the past five years, indicating an improvement in the company's capital structure. The ratio decreased from 4.74 in April 2020 to 1.74 in April 2024. This signifies that NetApp has been reducing its reliance on debt to finance its operations and has been strengthening its equity base.
A lower debt-to-equity ratio is generally preferred by investors and creditors as it suggests a lower level of financial risk and a stronger financial position. NetApp's decreasing ratio implies that the company has been effectively managing its debt levels relative to its equity, which may enhance its financial stability and ability to weather economic downturns.
It is important to note that a declining debt-to-equity ratio may also indicate that the company is growing its equity faster than its debt, which could be driven by profitability, successful capital-raising activities, or deleveraging efforts. Investors usually view such trends positively as they indicate a more conservative approach to financial management.
Overall, the decreasing debt-to-equity ratio of NetApp Inc over the past five years reflects a positive development in the company's financial health and risk profile, which could contribute to its long-term sustainability and growth prospects.
Peer comparison
Apr 26, 2024