Quanex Building Products (NX)
Debt-to-assets ratio
| Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | ||
|---|---|---|---|---|---|---|
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total assets | US$ in thousands | 831,143 | 724,617 | 717,323 | 691,585 | 645,110 |
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
October 31, 2023 calculation
Debt-to-assets ratio = Long-term debt ÷ Total assets
= $—K ÷ $831,143K
= 0.00
The debt-to-assets ratio measures a company's leverage by comparing its total debt to its total assets. A lower ratio indicates a lower level of debt relative to assets, which can signify less financial risk.
Looking at Quanex Building Products Corp's debt-to-assets ratio over the past five years, we see a decreasing trend from 2019 to 2022, followed by a slight increase in 2023.
In 2019, the debt-to-assets ratio was 0.24, indicating that for every dollar of assets, the company had $0.24 of debt. This relatively high ratio suggests a higher level of financial risk due to the significant reliance on debt financing.
The ratio decreased significantly to 0.17 in 2020, demonstrating a reduction in the company's debt relative to its assets. This downward trend continued in 2021 with a ratio of 0.07, indicating a further improvement in the company's leverage position.
The trend reversed in 2022, with the ratio decreasing to 0.04, signifying even lower indebtedness relative to assets. This could indicate a conservative approach to capital structure and a stronger financial position.
However, in 2023, the ratio slightly increased to 0.08, showing a small shift towards a higher level of debt relative to assets compared to the previous year. This increase, although modest, suggests a potential shift in the company's financing strategy.
Overall, the decreasing trend from 2019 to 2022 reflected a positive development in the company's leverage position, indicating a lower reliance on debt financing and reduced financial risk. While the slight increase in 2023 is noteworthy, it would be important to monitor future trends to assess the impact on the company's financial risk and stability.
Peer comparison
Oct 31, 2023