Palo Alto Networks Inc (PANW)

Debt-to-capital ratio

		Jul 31, 2024	Jul 31, 2023	Jul 31, 2022	Jul 31, 2021	Jul 31, 2020
Long-term debt	US$ in thousands	—	—	0	1,668,100	3,084,100
Total stockholders’ equity	US$ in thousands	5,169,700	1,748,400	210,000	634,500	1,101,800
Debt-to-capital ratio		0.00	0.00	0.00	0.72	0.74

July 31, 2024 calculation

Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $—K ÷ ($—K + $5,169,700K)
= 0.00

The debt-to-capital ratio of Palo Alto Networks Inc witnessed a significant decline over the five-year period from 2020 to 2024. It stood at 0.74 in 2020, gradually decreasing to 0.72 in 2021, and eventually dropping to 0.00 for the subsequent three years. This indicates a notable shift in the company's capital structure, with a negligible level of debt relative to its total capital in recent years. The decreasing trend in the debt-to-capital ratio suggests that Palo Alto Networks has been decreasing its reliance on debt financing, potentially reducing financial risk and enhancing overall solvency. This favorable development may indicate prudent financial management and a focus on maintaining a strong balance sheet position.