Reliance Steel & Aluminum Co (RS)
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 | 1,141,900 | 1,139,400 | 1,642,000 | 1,638,900 | 1,523,600 |
| Total stockholders’ equity | US$ in thousands | 7,722,300 | 7,087,400 | 6,086,500 | 5,115,400 | 5,206,600 |
| Debt-to-capital ratio | 0.13 | 0.14 | 0.21 | 0.24 | 0.23 |
December 31, 2023 calculation
Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $1,141,900K ÷ ($1,141,900K + $7,722,300K)
= 0.13
The debt-to-capital ratio of Reliance Steel & Aluminum Co. has shown a decreasing trend over the past five years, declining from 0.23 in 2019 to 0.13 in 2023. This indicates that the company has been able to reduce its reliance on debt compared to its total capital structure. A lower debt-to-capital ratio suggests a healthier financial position, as it signifies that a smaller proportion of the company's capital is funded by debt.
The decreasing trend in the debt-to-capital ratio may imply that Reliance Steel & Aluminum Co. has been effectively managing its debt levels or has been able to increase its equity financing over the years. This may enhance the company's financial stability and reduce its financial risk, as lower debt levels typically mean lower interest obligations and less financial leverage.
However, analysts should also consider other factors such as the industry norms, economic conditions, and interest rate environment when interpreting the debt-to-capital ratio. It is essential to assess the company's overall financial health by analyzing other financial ratios and key performance indicators in conjunction with the debt-to-capital ratio to obtain a comprehensive understanding of Reliance Steel & Aluminum Co.'s financial position.
Peer comparison
Dec 31, 2023