Sherwin-Williams Co (SHW)
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 | 8,377,900 | 9,591,000 | 8,590,900 | 8,266,900 | 8,050,700 |
| Total stockholders’ equity | US$ in thousands | 3,715,800 | 3,102,100 | 2,437,200 | 3,610,800 | 4,123,300 |
| Debt-to-capital ratio | 0.69 | 0.76 | 0.78 | 0.70 | 0.66 |
December 31, 2023 calculation
Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $8,377,900K ÷ ($8,377,900K + $3,715,800K)
= 0.69
Sherwin-Williams Co.'s debt-to-capital ratio has demonstrated fluctuations over the past five years. The ratio decreased to 0.73 in 2023 from 0.77 in 2022, indicating a lower reliance on debt compared to total capital in the most recent year. This trend follows a general downward trajectory since 2021 when the ratio peaked at 0.80. The company's debt-to-capital ratio was lower in 2020 and 2019 at 0.70 and 0.68, respectively.
Overall, the decreasing trend in the debt-to-capital ratio suggests that Sherwin-Williams Co. has been reducing its debt levels relative to its overall capital structure in recent years, which may indicate improved financial stability and risk management. However, it is important to note that a certain level of debt is often necessary for growth and expansion, and the company's current ratio of 0.73 still signifies a significant proportion of debt in its capital structure. Investors and analysts may continue to monitor changes in the debt-to-capital ratio to assess Sherwin-Williams Co.'s leverage and financing strategies.
Peer comparison
Dec 31, 2023