Rush Enterprises A Inc (RUSHA)

Debt-to-equity ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Long-term debt	US$ in thousands	414,002	275,433	334,926	387,982	438,413
Total stockholders’ equity	US$ in thousands	1,870,880	1,744,490	1,466,750	1,268,040	1,159,490
Debt-to-equity ratio		0.22	0.16	0.23	0.31	0.38

December 31, 2023 calculation

Debt-to-equity ratio = Long-term debt ÷ Total stockholders’ equity
= $414,002K ÷ $1,870,880K
= 0.22

The debt-to-equity ratio of Rush Enterprises A Inc has shown a decreasing trend over the past five years, indicating an improving debt position relative to equity. In 2023, the company's debt-to-equity ratio was 0.22, which was higher than the previous year's ratio of 0.16. However, when compared to 2021, 2020, and 2019, the current ratio is still relatively lower, suggesting a stronger financial position in terms of leverage.

The decrease in the debt-to-equity ratio indicates that the company has been relying less on debt financing and increasing its equity stake in the business. This trend can be considered positive as lower debt relative to equity signifies lower financial risk and potentially better solvency.

Overall, Rush Enterprises A Inc's decreasing debt-to-equity ratio suggests a prudent approach to managing its capital structure and financial risk, which may enhance its financial stability and ability to weather economic uncertainties.