Somnigroup International Inc. (SGI)
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 | — | — | — | — | 1,502,600 |
| Total stockholders’ equity | US$ in thousands | 333,400 | -12,300 | 285,800 | 503,600 | 359,500 |
| Debt-to-capital ratio | 0.00 | — | 0.00 | 0.00 | 0.81 |
December 31, 2023 calculation
Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $—K ÷ ($—K + $333,400K)
= 0.00
The debt-to-capital ratio provides insights into the extent of a company's financial leverage and its ability to meet its financial obligations. In the case of Somnigroup International Inc., the company's debt-to-capital ratio was 0.81 as of December 31, 2019. This indicates that 81% of the company's capital structure was funded by debt at that time.
However, it is noteworthy that the debt-to-capital ratio declined significantly to 0.00 as of December 31, 2020 and has remained at 0.00 for the subsequent years up to December 31, 2023. A debt-to-capital ratio of 0.00 signifies that the company has no debt in its capital structure during these years, thereby relying entirely on equity to finance its operations.
The sudden drop and subsequent maintenance of a zero debt-to-capital ratio could potentially indicate that Somnigroup International Inc. has actively reduced its reliance on debt financing, possibly by paying off existing debts or opting for alternative financing methods. This shift towards a debt-free capital structure may enhance the company's financial stability and reduce its overall financial risk.
It is important to note that for December 31, 2022, the debt-to-capital ratio is marked as "—", suggesting that data for this period is not available. This limited data availability for 2022 might affect the overall trend analysis of the company's debt-to-capital ratio. Overall, the trend of decreasing and ultimately reaching zero debt-to-capital ratio for Somnigroup International Inc. indicates a significant shift in its capital structure towards a more equity-driven financing approach.
Peer comparison
Dec 31, 2023