Skechers USA Inc (SKX)
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 | 242,944 | 216,488 | 263,445 | 679,415 | 49,183 |
| Total stockholders’ equity | US$ in thousands | 4,019,340 | 3,569,990 | 3,259,340 | 2,481,440 | 2,314,660 |
| Debt-to-capital ratio | 0.06 | 0.06 | 0.07 | 0.21 | 0.02 |
December 31, 2023 calculation
Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $242,944K ÷ ($242,944K + $4,019,340K)
= 0.06
The debt-to-capital ratio of Skechers U S A, Inc. has exhibited fluctuations over the past five years. The ratio decreased from 0.23 in 2020 to 0.05 in 2019, indicating a significant decline in the company's reliance on debt to finance its operations and investments. However, in subsequent years, the ratio increased gradually to 0.09 in both 2021 and 2022 before declining again to 0.07 in 2023.
A lower debt-to-capital ratio generally suggests lower financial risk and higher financial stability, as it indicates that the company has a smaller proportion of debt relative to its total capital. In this case, Skechers U S A, Inc. has shown a trend towards a more conservative capital structure over the period analyzed.
It is important to note that a low debt-to-capital ratio may also imply limited leverage, which could potentially hinder the company's ability to take advantage of growth opportunities or achieve optimal returns for shareholders. As such, while a decreasing trend in the debt-to-capital ratio can be seen as positive in terms of risk management, it is essential for the company to strike a balance between maintaining a strong financial position and leveraging debt effectively to drive growth and profitability.
Peer comparison
Dec 31, 2023