SM Energy Co (SM)

Debt-to-capital ratio

		Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Long-term debt	US$ in thousands	1,575,330	1,574,550	1,573,770	1,572,990	3,144,420	3,142,860	3,141,300	3,960,780	3,754,620	4,155,260	4,331,750	4,386,300	2,214,320	2,175,040	193,000	2,645,380	2,610,300	2,735,770	2,721,240	2,646,290
Total stockholders’ equity	US$ in thousands	3,615,850	3,404,290	3,298,470	3,229,800	3,085,460	2,867,660	2,444,900	2,115,110	2,063,130	1,636,900	1,552,510	1,769,670	2,016,160	2,185,110	2,280,830	2,341,720	2,748,990	2,843,750	2,801,840	2,743,220
Debt-to-capital ratio		0.30	0.32	0.32	0.33	0.50	0.52	0.56	0.65	0.65	0.72	0.74	0.71	0.52	0.50	0.08	0.53	0.49	0.49	0.49	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 over the past two years, indicating improvements in the company's financial leverage. The ratio has decreased from 0.48 in Q1 2022 to 0.30 in Q4 2023. This signifies that the company is relying less on debt to finance its operations and investments, and is instead relying more on equity.

A lower debt-to-capital ratio is generally viewed positively by investors and creditors as it suggests lower financial risk and greater financial stability. The decreasing trend in the ratio reflects the company's efforts to strengthen its balance sheet and improve its overall financial health.

The consistent reduction in the debt-to-capital ratio may also indicate that SM Energy Co is effectively managing its debt levels and strategically using capital to support its business operations and growth initiatives. Despite the fluctuations in the ratio over the quarters, the overall downward trend suggests a positive financial position for the company in terms of its leverage and capital structure.