Resideo Technologies Inc (REZI)

Debt-to-capital ratio

Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Long-term debt US$ in thousands 1,396,000 1,397,000 1,400,000 1,402,000 1,404,000 1,407,000 1,410,000 1,412,000 1,220,000 1,222,000 1,184,000 1,186,000 1,155,000 1,141,000 1,140,000 1,149,000 1,158,000 1,165,000 1,169,000 1,174,000
Total stockholders’ equity US$ in thousands 2,749,000 2,645,000 2,677,000 2,604,000 2,529,000 2,400,000 2,394,000 2,361,000 2,252,000 2,158,000 2,103,000 2,032,000 1,993,000 1,605,000 1,495,000 1,521,000 1,602,000 1,573,000 1,593,000 1,592,000
Debt-to-capital ratio 0.34 0.35 0.34 0.35 0.36 0.37 0.37 0.37 0.35 0.36 0.36 0.37 0.37 0.42 0.43 0.43 0.42 0.43 0.42 0.42

December 31, 2023 calculation

Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $1,396,000K ÷ ($1,396,000K + $2,749,000K)
= 0.34

The debt-to-capital ratio of Resideo Technologies Inc has been relatively stable over the past eight quarters, ranging between 0.44 and 0.48. This ratio measures the proportion of total debt to the total capital employed by the company, indicating the extent to which the company relies on debt financing compared to equity.

With the ratio hovering around 0.44 to 0.48, it suggests that Resideo Technologies Inc's capital structure has been moderately leveraged, with a significant portion of its capital being financed through debt. A decreasing trend from 0.46 in Q4 2022 to 0.44 in Q4 2023 may indicate a slight improvement in the company's debt position relative to its capital base.

However, it is important to note that a higher debt-to-capital ratio can indicate higher financial risk, as the company may face challenges in servicing its debt obligations, especially during economic downturns. On the other hand, too low a ratio could signal underutilization of debt financing and potential missed opportunities for leveraging financial leverage for growth and expansion.

Overall, the stability of Resideo Technologies Inc's debt-to-capital ratio over the past eight quarters suggests a consistent financing strategy, but further analysis of the company's overall financial health and debt management policies would provide a more comprehensive understanding of its financial leverage position.