Otter Tail Corporation (OTTR)

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	824,059	823,821	734,014	624,432	689,581
Total stockholders’ equity	US$ in thousands	1,443,010	1,217,320	990,777	870,966	781,482
Debt-to-capital ratio		0.36	0.40	0.43	0.42	0.47

December 31, 2023 calculation

Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $824,059K ÷ ($824,059K + $1,443,010K)
= 0.36

The debt-to-capital ratio of Otter Tail Corporation has exhibited a decreasing trend over the last five years, declining from 0.47 in 2019 to 0.39 in 2023. This trend suggests that the company has been reducing its reliance on debt to finance its operations and growth, which could be viewed positively by investors and creditors. A lower debt-to-capital ratio indicates a lower financial risk and greater financial stability for the company. The decreasing ratio could also imply that Otter Tail Corporation has been effectively managing its debt levels in relation to its overall capital structure. However, it is important to note that the optimal level of debt can vary depending on the industry and specific circumstances of the company. Overall, the decreasing trend in Otter Tail Corporation's debt-to-capital ratio indicates a prudent approach to managing its debt obligations and capital structure.