Olin Corporation (OLN)
Debt-to-equity ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Long-term debt | US$ in thousands | 2,591,300 | 2,571,000 | 2,578,200 | 3,837,500 | 3,338,700 |
| Total stockholders’ equity | US$ in thousands | 2,232,400 | 2,543,600 | 2,652,200 | 1,450,800 | 2,417,500 |
| Debt-to-equity ratio | 1.16 | 1.01 | 0.97 | 2.65 | 1.38 |
December 31, 2023 calculation
Debt-to-equity ratio = Long-term debt ÷ Total stockholders’ equity
= $2,591,300K ÷ $2,232,400K
= 1.16
The debt-to-equity ratio of Olin Corp. has fluctuated over the past five years, indicating changes in the company's financial leverage and risk profile.
In 2023, the debt-to-equity ratio increased to 1.20 from 1.01 in 2022, suggesting that the company took on more debt relative to its equity. This could indicate either increased borrowing for growth opportunities or a decrease in shareholder equity.
The ratio was 1.05 in 2021, showing a slight improvement from the prior year. However, the significant increase to 2.66 in 2020 suggests a substantial rise in debt compared to equity, possibly due to external financing needs, acquisitions, or other strategic decisions.
The ratio moderated to 1.38 in 2019, indicating a reduction in debt relative to equity compared to the previous year. This could imply improved financial stability or a shift towards a more conservative capital structure.
Overall, a higher debt-to-equity ratio signifies a greater reliance on debt financing, which can amplify returns but also increases financial risk. Olin Corp.'s management should continue to monitor and manage this ratio to ensure a balanced capital structure that supports sustainable growth and mitigates excessive risk.
Peer comparison
Dec 31, 2023