Quanex Building Products (NX)
Debt-to-equity 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-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
October 31, 2023 calculation
Debt-to-equity ratio = Long-term debt ÷ Total stockholders’ equity
= $—K ÷ $545,554K
= 0.00
The debt-to-equity ratio measures the proportion of a company's financing that is provided by creditors compared to that provided by shareholders. A lower debt-to-equity ratio indicates a lower reliance on debt for financing, which is generally viewed favorably by investors and lenders.
Looking at the trend of Quanex Building Products Corp's debt-to-equity ratio over the past five years, we can observe fluctuations and potential shifts in the company's capital structure.
In 2019, the ratio stood at 0.48, indicating that the company had a higher level of debt relative to equity. This high ratio might have been a cause for concern among investors and creditors as it suggested higher financial risk.
In 2020, there was a decrease in the debt-to-equity ratio to 0.33, which represents a positive trend as the company reduced its reliance on debt as a source of funding. However, the ratio remained relatively high compared to the industry average.
By 2021, the ratio had decreased further to 0.13, signaling a notable improvement in the company's capital structure. This reduction in the ratio suggests that Quanex Building Products Corp had made efforts to decrease its debt levels compared to equity, which could lead to decreased financial risk and increased stability.
In 2022, the ratio remained low at 0.07, indicating a very conservative capital structure with low reliance on debt financing. This reflects positively on the company's ability to generate internal funds and manage its financial obligations.
The most recent data for 2023 shows a slight increase in the debt-to-equity ratio to 0.13. While it is still relatively low, the increase suggests a potential shift in the company's capital structure or financing strategy. It will be important to monitor future developments to understand the reasons behind this change and assess its potential impact on the company's financial risk profile.
Overall, Quanex Building Products Corp has shown a positive trend in managing its debt-to-equity ratio over the past five years. The company has gradually decreased its reliance on debt, which could enhance its financial stability and risk management. However, the recent uptick in the ratio highlights the importance of ongoing monitoring to ensure that the company maintains a prudent and sustainable capital structure.
Peer comparison
Oct 31, 2023