nVent Electric PLC (NVT)
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 | 1,748,800 | 1,068,200 | 994,200 | 928,000 | 1,047,100 |
| Total stockholders’ equity | US$ in thousands | 3,142,100 | 2,731,700 | 2,496,100 | 2,409,800 | 2,592,500 |
| Debt-to-capital ratio | 0.36 | 0.28 | 0.28 | 0.28 | 0.29 |
December 31, 2023 calculation
Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $1,748,800K ÷ ($1,748,800K + $3,142,100K)
= 0.36
The debt-to-capital ratio of nVent Electric plc has shown some fluctuations over the past five years.
In 2019 and 2021, the company had a debt-to-capital ratio of 0.29, indicating that approximately 29% of nVent Electric's capital structure was comprised of debt during those years. In 2020 and 2022, the ratio remained consistent at 0.28, suggesting a slightly lower level of debt relative to capital.
However, by the end of 2023, nVent Electric's debt-to-capital ratio increased to 0.36, indicating that the company had taken on more debt compared to its capital base. This could raise concerns about the company's leverage and financial risk, as a higher debt-to-capital ratio implies a greater reliance on debt financing rather than equity.
Overall, the trend in nVent Electric plc's debt-to-capital ratio indicates some variability in the company's capital structure over the years, with a notable increase in leverage by the end of 2023. Investors and stakeholders may want to closely monitor this ratio as it can provide insights into the company's financial health and risk profile.
Peer comparison
Dec 31, 2023