Scotts Miracle-Gro Company (SMG)
Debt-to-assets ratio
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | ||
|---|---|---|---|---|---|---|
| Long-term debt | US$ in thousands | 2,174,200 | 2,557,400 | 2,826,200 | 2,236,700 | 1,455,100 |
| Total assets | US$ in thousands | 2,871,900 | 3,413,700 | 4,296,800 | 4,800,000 | 3,380,500 |
| Debt-to-assets ratio | 0.76 | 0.75 | 0.66 | 0.47 | 0.43 |
September 30, 2024 calculation
Debt-to-assets ratio = Long-term debt ÷ Total assets
= $2,174,200K ÷ $2,871,900K
= 0.76
The debt-to-assets ratio of Scotts Miracle-Gro Company has shown an increasing trend over the past five years, indicating a higher proportion of debt relative to total assets. In September 2020 and 2021, the ratio stood at 0.43 and 0.47, respectively, suggesting that 43% and 47% of the company's assets were financed by debt during those years.
Subsequently, the ratio continued to rise, reaching 0.66 in September 2022, 0.75 in September 2023, and finally 0.76 in September 2024. This indicates a steady increase in the company's leverage, with 66%, 75%, and 76% of assets being funded by debt in the respective years.
The rising trend in the debt-to-assets ratio may indicate that Scotts Miracle-Gro Company has been increasingly relying on debt financing to support its operations and growth initiatives. While higher leverage can amplify returns during periods of growth, it also increases the company's financial risk and interest payment obligations.
It is essential for investors and stakeholders to closely monitor the company's debt levels and overall financial health, as a high debt-to-assets ratio can signal potential liquidity issues or financial distress if not managed prudently.
Peer comparison
Sep 30, 2024