RBC Bearings Incorporated (RBC)
Debt-to-capital ratio
| Mar 31, 2024 | Mar 31, 2023 | Mar 31, 2022 | Mar 31, 2021 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|
| Long-term debt | US$ in thousands | 1,188,100 | 1,393,500 | 1,686,800 | 13,495 | 16,583 |
| Total stockholders’ equity | US$ in thousands | 2,751,900 | 2,535,900 | 2,372,500 | 1,232,100 | 1,122,900 |
| Debt-to-capital ratio | 0.30 | 0.35 | 0.42 | 0.01 | 0.01 |
March 31, 2024 calculation
Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $1,188,100K ÷ ($1,188,100K + $2,751,900K)
= 0.30
The debt-to-capital ratio of RBC Bearings Incorporated has exhibited a decreasing trend over the past five years, reflecting the company's ability to reduce its reliance on debt in financing its operations. In particular, the ratio decreased from 0.42 in March 2022 to 0.30 in March 2024.
The lower debt-to-capital ratio indicates that RBC Bearings has a lower proportion of debt relative to its total capital, which could be a positive sign for investors and creditors. The decreasing trend suggests that the company may be managing its debt more effectively and improving its overall financial health.
It is important to note, however, that a very low debt-to-capital ratio, such as the ratios of 0.01 in March 2021 and March 2020, may also signal that the company is being overly conservative in its capital structure and may not be utilizing debt efficiently to fund growth opportunities. Investors should consider the context of the ratio within the company's overall financial strategy and industry benchmarks when assessing the firm's risk profile.
Peer comparison
Mar 31, 2024