Otis Worldwide Corp (OTIS)
Debt-to-capital ratio
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Long-term debt | US$ in thousands | 6,866,000 | 6,822,000 | 6,117,000 | 6,116,000 | 6,098,000 | 6,459,000 | 6,602,000 | 6,694,000 | 7,249,000 | 5,458,000 | 5,457,000 | 5,457,000 | 5,262,000 | 5,512,000 | 6,260,000 | — |
| Total stockholders’ equity | US$ in thousands | -4,924,000 | -4,788,000 | -4,852,000 | -4,857,000 | -4,870,000 | -4,913,000 | -4,997,000 | -5,029,000 | -3,625,000 | -3,854,000 | -3,856,000 | -3,910,000 | -3,862,000 | -4,024,000 | -4,242,000 | -4,189,000 |
| Debt-to-capital ratio | 3.54 | 3.35 | 4.84 | 4.86 | 4.97 | 4.18 | 4.11 | 4.02 | 2.00 | 3.40 | 3.41 | 3.53 | 3.76 | 3.70 | 3.10 | — |
December 31, 2023 calculation
Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $6,866,000K ÷ ($6,866,000K + $-4,924,000K)
= 3.54
The debt-to-capital ratio of Otis Worldwide Corp has exhibited fluctuations over the past eight quarters. The ratio ranged from 2.83 to 3.98 during this period. Generally, a higher debt-to-capital ratio indicates higher financial leverage and potential risk due to increased reliance on debt financing.
In the most recent quarter (Q4 2023), the debt-to-capital ratio decreased to 3.49 from the previous quarter, Q3 2023, where it was at 2.83. This decrease may suggest that Otis Worldwide Corp may have reduced its debt relative to its capital structure in Q4 2023. However, it is important to monitor future trends in the debt-to-capital ratio to assess the company's ongoing financial leverage and risk management strategy.
Overall, a downward trend in the debt-to-capital ratio can be seen from Q2 2022 to Q4 2023, which might indicate a potential focus on reducing debt levels or improving the company's capital base during this period. The gradual decline in the ratio signifies a positive trend towards a potentially more stable financial position for Otis Worldwide Corp.
Peer comparison
Dec 31, 2023