Packaging Corp of America (PKG)
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 | 2,472,200 | 2,473,600 | 2,471,500 | 2,479,400 | 2,476,800 |
| Total stockholders’ equity | US$ in thousands | 3,997,300 | 3,667,100 | 3,607,200 | 3,246,300 | 3,071,000 |
| Debt-to-capital ratio | 0.38 | 0.40 | 0.41 | 0.43 | 0.45 |
December 31, 2023 calculation
Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $2,472,200K ÷ ($2,472,200K + $3,997,300K)
= 0.38
Packaging Corp Of America's debt-to-capital ratio has shown a fluctuating trend over the past five years, with values ranging from 0.40 to 0.45. The ratio measures the proportion of the company's capital that is financed by debt, indicating the entity's reliance on borrowing to fund its operations and investments.
In 2023, the debt-to-capital ratio increased to 0.42 from the previous year's 0.40. This suggests that the company's level of debt relative to its total capital grew slightly, indicating a higher proportion of debt financing compared to equity. However, the ratio remained relatively stable within the range observed in recent years.
A debt-to-capital ratio of 0.42 implies that 42% of Packaging Corp Of America's capital structure is in the form of debt, while the remaining 58% is from equity. This indicates a moderate level of leverage in the company's capital structure, where debt plays a significant but not overwhelming role in funding its operations and investments.
Overall, the company's debt-to-capital ratio reflects a balanced approach to capital structure management, maintaining a reasonable mix of debt and equity financing to support its business activities. Continued monitoring of this ratio will be essential to assess the company's financial risk and leverage position in the future.
Peer comparison
Dec 31, 2023