Pool Corporation (POOL)
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 | 1,015,120 | 1,361,760 | 1,171,580 | 404,149 | 499,662 |
| Total stockholders’ equity | US$ in thousands | 1,312,790 | 1,235,190 | 1,071,390 | 639,470 | 410,180 |
| Debt-to-capital ratio | 0.44 | 0.52 | 0.52 | 0.39 | 0.55 |
December 31, 2023 calculation
Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $1,015,120K ÷ ($1,015,120K + $1,312,790K)
= 0.44
The debt-to-capital ratio measures the proportion of a company's capital that is funded by debt rather than equity. Pool Corporation's debt-to-capital ratio has fluctuated over the past five years, ranging from 0.39 to 0.55.
In 2023, the debt-to-capital ratio decreased to 0.45 from 0.53 in 2022. This indicates that the company relied less on debt financing relative to its total capital structure in 2023.
Compared to the highest ratio of 0.55 in 2019, Pool Corporation has gradually reduced its debt relative to its capital base. This is a positive trend as lower debt levels can signify lower financial risk and improved financial health for the company.
Overall, Pool Corporation has managed its debt-to-capital ratio effectively over the years, demonstrating a strategic approach to balancing its capital structure between debt and equity financing.