SM Energy Co (SM)

Debt-to-equity 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-equity ratio 0.44 0.46 0.48 0.49 1.02 1.10 1.28 1.87 1.82 2.54 2.79 2.48 1.10 1.00 0.08 1.13 0.95 0.96 0.97 0.96

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 been gradually decreasing over the last two years, indicating a positive trend in terms of the company's leverage. In Q4 2023, the ratio stood at 0.44, the lowest level in the provided data series, showing that the company has a relatively lower amount of debt compared to its equity. This suggests that SM Energy Co has been effectively managing its debt levels and relying more on equity financing.

The improvement in the debt-to-equity ratio from Q1 2022 (0.94) to Q4 2023 (0.44) is significant, reflecting the company's efforts to reduce its reliance on debt to fund its operations and investments. A lower debt-to-equity ratio generally indicates a healthier financial position, as it implies lower financial risk and less vulnerability to economic downturns that could impact debt repayment.

Overall, the decreasing trend in SM Energy Co's debt-to-equity ratio suggests a positive direction in terms of the company's capital structure and financial health. It indicates that the company has been making strides towards maintaining a more balanced and sustainable mix of debt and equity in its capital structure.