Quanex Building Products (NX)
Debt-to-capital ratio
| Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | ||
|---|---|---|---|---|---|---|
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 545,554 | 464,835 | 419,782 | 355,759 | 330,187 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
October 31, 2023 calculation
Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $—K ÷ ($—K + $545,554K)
= 0.00
The debt-to-capital ratio is a measure of a company's financial leverage, indicating the proportion of a company's capital structure that is financed by debt. It is calculated by dividing the total debt by the sum of total debt and total shareholders' equity.
Analyzing Quanex Building Products Corp's debt-to-capital ratio over the past five years reveals the following trends:
1. Oct 31, 2019: The debt-to-capital ratio was at its highest at 0.32, indicating that 32% of the company's capital structure was financed by debt.
2. Oct 31, 2020: The ratio decreased to 0.25, suggesting a reduction in the proportion of debt in the company's capital structure. This may indicate a shift towards funding from equity or a reduction in overall debt levels.
3. Oct 31, 2021: The ratio remained constant at 0.11, indicating that 11% of the capital structure was financed by debt. There was no change in the debt-to-capital structure in this year.
4. Oct 31, 2022: The ratio decreased to 0.06, marking the lowest level over the five-year period. This suggests a significant reduction in the proportion of debt in the capital structure.
5. Oct 31, 2023: The ratio increased to 0.11 from the previous year, signifying a slight uptick in the proportion of debt used to finance the company's operations.
In general, the decreasing trend in the debt-to-capital ratio from 0.32 in 2019 to 0.11 in 2023 could indicate a preference for equity financing or a reduction in overall debt levels. This trend suggests that the company may be actively managing its capital structure to reduce financial risk and improve its financial flexibility. However, the slight uptick in 2023 should be monitored to ensure that the company is maintaining a balanced and sustainable capital structure.
Peer comparison
Oct 31, 2023