SM Energy Co (SM)

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	1,575,330	3,144,420	3,754,620	2,214,320	2,610,300
Total stockholders’ equity	US$ in thousands	3,615,850	3,085,460	2,063,130	2,016,160	2,748,990
Debt-to-capital ratio		0.30	0.50	0.65	0.52	0.49

December 31, 2023 calculation

Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $1,575,330K ÷ ($1,575,330K + $3,615,850K)
= 0.30

The debt-to-capital ratio of SM Energy Co has shown a decreasing trend from 0.52 in 2020 to 0.30 in 2023. This indicates that the company has been reducing its reliance on debt as a source of capital in recent years. A lower debt-to-capital ratio suggests that the company is using more of its own capital to fund its operations and growth, which may indicate a stronger financial position and lower risk of default. This trend could be seen as a positive signal to investors and creditors, as it may enhance the company's financial stability and flexibility. Overall, the decreasing trend in the debt-to-capital ratio for SM Energy Co over the past few years reflects a prudent financial management strategy aimed at reducing leverage and improving overall financial health.