SM Energy Co (SM)

Debt-to-equity 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-equity ratio		0.44	1.02	1.82	1.10	0.95

December 31, 2023 calculation

Debt-to-equity ratio = Long-term debt ÷ Total stockholders’ equity
= $1,575,330K ÷ $3,615,850K
= 0.44

The debt-to-equity ratio of SM Energy Co has exhibited a decreasing trend over the past five years, indicating a lower reliance on debt financing in relation to equity. In 2023, the ratio stands at 0.44, down from 0.51 in 2022 and significantly lower than the ratios of 1.01 in 2021, 1.10 in 2020, and 0.99 in 2019. This decline suggests that the company has been progressively reducing its debt levels or increasing its equity, which could improve its financial stability and creditworthiness. A lower debt-to-equity ratio generally indicates a healthier balance sheet and lower financial risk, as the company has less debt to repay in proportion to its shareholders' equity. This trend may reflect strategic decisions by SM Energy Co to manage its capital structure prudently and optimize its financial position.