Stepan Company (SCL)
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 | 401,248 | 455,029 | 322,862 | 160,812 | 198,532 |
| Total stockholders’ equity | US$ in thousands | 1,216,490 | 1,166,060 | 1,074,190 | 986,693 | 891,783 |
| Debt-to-capital ratio | 0.25 | 0.28 | 0.23 | 0.14 | 0.18 |
December 31, 2023 calculation
Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $401,248K ÷ ($401,248K + $1,216,490K)
= 0.25
The debt-to-capital ratio of Stepan Co. has fluctuated over the past five years. In 2023, the ratio increased to 0.35 from 0.33 in 2022, indicating that the company's reliance on debt to finance its operations and growth has slightly increased. This could be a cause for caution as higher debt levels may increase financial risk and interest obligations.
Comparing the ratio to earlier years, it is evident that there has been a generally increasing trend since 2020 when the ratio was 0.17. This suggests a possible shift in the company's capital structure towards more debt financing over the years.
While the 2023 ratio is higher compared to previous years, it is still below the ratio in 2021 (0.25), indicating that the company had higher levels of debt relative to its capital at that time. The ratio in 2020 was 0.17, which was the lowest in the past five years, suggesting that the company might have actively reduced its debt levels or increased its capital during that period.
Overall, the debt-to-capital ratio of Stepan Co. has exhibited fluctuations, with the recent uptick possibly signaling a strategic decision to increase debt usage for various reasons such as funding growth opportunities or capital investments. Investors and analysts may want to delve deeper into the company's financials and future plans to assess the implications of the changing debt-to-capital ratio on the company's financial health and risk profile.
Peer comparison
Dec 31, 2023