Parker-Hannifin Corporation (PH)

Debt-to-capital ratio

		Jun 30, 2024	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020
Long-term debt	US$ in thousands	8,469,740	8,796,280	9,755,820	6,582,050	7,652,260
Total stockholders’ equity	US$ in thousands	12,072,000	10,326,900	8,848,010	8,398,310	6,227,220
Debt-to-capital ratio		0.41	0.46	0.52	0.44	0.55

June 30, 2024 calculation

Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $8,469,740K ÷ ($8,469,740K + $12,072,000K)
= 0.41

The debt-to-capital ratio of Parker-Hannifin Corporation has exhibited some fluctuations over the past five years. From June 30, 2020, to June 30, 2022, the ratio increased from 0.55 to 0.52, indicating a higher proportion of debt relative to total capital during this period.

However, in the subsequent years, the ratio decreased to 0.46 in 2023 and further to 0.41 in 2024. This downward trend suggests that the company has been reducing its reliance on debt financing in relation to its total capital structure.

Overall, a decreasing trend in the debt-to-capital ratio signifies a potentially improved financial health and reduced financial risk for Parker-Hannifin Corporation. It indicates the company is using less debt to finance its operations and investments, which could result in lower interest expenses and improved solvency.