PriceSmart Inc (PSMT)

Debt-to-capital ratio

		Aug 31, 2024	Aug 31, 2023	Aug 31, 2022	Aug 31, 2021	Aug 31, 2020
Long-term debt	US$ in thousands	94,443	119,487	103,556	110,110	112,610
Total stockholders’ equity	US$ in thousands	1,122,960	1,107,040	991,073	915,345	831,719
Debt-to-capital ratio		0.08	0.10	0.09	0.11	0.12

August 31, 2024 calculation

Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $94,443K ÷ ($94,443K + $1,122,960K)
= 0.08

The debt-to-capital ratio of PriceSmart Inc has exhibited a downward trend over the past five years, decreasing from 0.12 in August 2020 to 0.08 in August 2024. This indicates that the company's reliance on debt as a source of financing in relation to its total capital has been reducing over the years. A lower debt-to-capital ratio suggests a stronger financial position and lower financial risk for the company, as it indicates a larger proportion of its capital is funded by equity rather than debt. This trend may reflect the company's efforts to manage its capital structure efficiently and reduce its leverage, potentially improving its creditworthiness and financial stability.