O’Reilly Automotive Inc (ORLY)

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	5,570,120	4,371,650	3,826,980	4,123,220	3,890,530
Total stockholders’ equity	US$ in thousands	-1,739,280	-1,060,750	-66,423	140,258	397,340
Debt-to-capital ratio		1.45	1.32	1.02	0.97	0.91

December 31, 2023 calculation

Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $5,570,120K ÷ ($5,570,120K + $-1,739,280K)
= 1.45

O`Reilly Automotive, Inc.'s debt-to-capital ratio has been gradually increasing over the past five years. The ratio was 0.91 in 2019 and has since risen to 1.45 in 2023. This indicates that the company has been relying more on debt to finance its operations and growth relative to its total capital structure.

The increasing trend in the debt-to-capital ratio may suggest that O`Reilly Automotive, Inc. has been taking on more debt compared to its equity in recent years. This could potentially increase the company's financial risk as higher debt levels typically come with higher interest payments and repayment obligations.

Investors and analysts should closely monitor O`Reilly Automotive, Inc.'s debt levels and overall capital structure to assess its financial health and ability to meet its debt obligations. A continued increase in the debt-to-capital ratio may raise concerns about the company's leverage and solvency position.