Otter Tail Corporation (OTTR)

Debt-to-equity ratio

Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Long-term debt US$ in thousands 943,734 824,059 823,821 734,014 624,432
Total stockholders’ equity US$ in thousands 1,668,500 1,443,010 1,217,320 990,777 870,966
Debt-to-equity ratio 0.57 0.57 0.68 0.74 0.72

December 31, 2024 calculation

Debt-to-equity ratio = Long-term debt ÷ Total stockholders’ equity
= $943,734K ÷ $1,668,500K
= 0.57

The debt-to-equity ratio of Otter Tail Corporation has been fairly stable over the past five years, ranging from 0.57 to 0.74. This indicates that the company has been using a moderate amount of debt to finance its operations relative to its equity. A decreasing trend in the ratio from 2020 to 2024 suggests that the company has been relying less on debt over time in comparison to its equity funding. This may indicate a prudent approach to managing its financial leverage and potential risks associated with high debt levels. Overall, the decreasing trend in the debt-to-equity ratio reflects a positive financial position in terms of the company's capital structure.