Perrigo Company PLC (PRGO)

Debt-to-assets ratio

Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Long-term debt US$ in thousands 3,632,800 4,070,400 2,916,700 3,527,600 3,365,800
Total assets US$ in thousands 10,809,100 11,017,300 10,425,700 11,488,400 11,301,400
Debt-to-assets ratio 0.34 0.37 0.28 0.31 0.30

December 31, 2023 calculation

Debt-to-assets ratio = Long-term debt ÷ Total assets
= $3,632,800K ÷ $10,809,100K
= 0.34

The debt-to-assets ratio of Perrigo Company plc has shown a consistent upward trend over the past five years, increasing from 0.30 in 2019 to 0.38 in 2023. This indicates that the company's reliance on debt to finance its assets has been growing steadily over the years.

A debt-to-assets ratio of 0.38 in 2023 means that 38% of Perrigo's assets are financed by debt, while the remaining 62% are financed by equity. This suggests that the company's creditors have a significant claim on its assets compared to its equity investors.

While a higher debt-to-assets ratio can indicate potential financial risk due to increased leverage, it can also signal that a company is using debt as a strategic tool to boost growth and profitability. It is essential to consider Perrigo's overall financial health, cash flow generation, and ability to meet its debt obligations when assessing the implications of its increasing debt-to-assets ratio.