Stepan Company (SCL)
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 | 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-equity ratio | 0.33 | 0.39 | 0.30 | 0.16 | 0.22 |
December 31, 2023 calculation
Debt-to-equity ratio = Long-term debt ÷ Total stockholders’ equity
= $401,248K ÷ $1,216,490K
= 0.33
The debt-to-equity ratio of Stepan Co. has shown an increasing trend over the past five years, indicating a higher reliance on debt financing relative to equity. In particular, the ratio increased from 0.25 in 2019 to 0.54 in 2023, reflecting a significant shift towards higher debt levels compared to equity. This suggests that the company may be taking on more debt to fund its operations or expansions.
It is important to note that a higher debt-to-equity ratio can indicate increased financial risk, as higher debt levels can lead to higher interest payments and potential liquidity pressures. However, it can also indicate potential leveraging for growth opportunities or tax advantages from debt financing.
Overall, the upward trend in Stepan Co.'s debt-to-equity ratio suggests a changing capital structure that may require closer monitoring to ensure that the company maintains a healthy balance between debt and equity to support its financial stability and growth objectives.
Peer comparison
Dec 31, 2023