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.