Phibro Animal Health Corporation (PAHC)

Debt-to-equity ratio

		Jun 30, 2024	Mar 31, 2024	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	Dec 31, 2019	Sep 30, 2019
Long-term debt	US$ in thousands	282,289	291,008	297,853	304,717	311,541	273,016	276,806	280,738	272,925	400,621	387,317	394,014	382,710	356,786	364,943	378,100	368,257	349,851	357,446	381,040
Total stockholders’ equity	US$ in thousands	256,641	270,094	270,803	273,069	282,509	272,328	268,370	262,756	262,442	266,945	239,294	233,305	238,529	215,921	213,322	192,412	188,204	195,345	217,415	206,694
Debt-to-equity ratio		1.10	1.08	1.10	1.12	1.10	1.00	1.03	1.07	1.04	1.50	1.62	1.69	1.60	1.65	1.71	1.97	1.96	1.79	1.64	1.84

June 30, 2024 calculation

Debt-to-equity ratio = Long-term debt ÷ Total stockholders’ equity
= $282,289K ÷ $256,641K
= 1.10

The debt-to-equity ratio of Phibro Animal Health Corporation has fluctuated over the past several quarters, indicating varying levels of debt relative to equity in the company's capital structure. The ratio stood at 1.10 as of June 30, 2024, slightly higher than the previous quarter's ratio of 1.08. This suggests that the company had 1.10 units of debt for every unit of equity during that period.

Looking back over the past few quarters, we observe some fluctuations in the debt-to-equity ratio. For instance, the ratio was at its lowest in the first quarter of 2023 at 1.00, indicating a lower reliance on debt financing compared to equity. However, it increased steadily over the next few quarters, reaching a peak of 1.97 as of September 30, 2020, before gradually decreasing thereafter.

The upward trend in the debt-to-equity ratio from the first quarter of 2022 to the second quarter of 2022, where the ratio spiked to 1.50 and 1.62 respectively, suggests a significant increase in debt relative to equity during that period. This sudden increase may indicate a strategic decision to leverage more debt to finance operations or investments.

While a high debt-to-equity ratio can indicate higher financial risk due to increased leverage, it can also signal potential for higher returns on equity if the company effectively utilizes the borrowed funds. It is important for investors and stakeholders to monitor changes in the debt-to-equity ratio over time to assess the company's financial health and risk profile.