Scotts Miracle-Gro Company (SMG)
Debt-to-capital 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 stockholders’ equity | US$ in thousands | -390,600 | -267,300 | 147,700 | 1,013,300 | 697,200 |
| Debt-to-capital ratio | 1.22 | 1.12 | 0.95 | 0.69 | 0.68 |
September 30, 2024 calculation
Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $2,174,200K ÷ ($2,174,200K + $-390,600K)
= 1.22
The debt-to-capital ratio of Scotts Miracle-Gro Company has been steadily increasing over the past five years, indicating a rising reliance on debt financing relative to the total capital employed in the business.
From 2020 to 2021, there was a slight increase in the ratio from 0.68 to 0.69, suggesting a marginal rise in debt utilization compared to the overall capital structure. The most significant jump was observed from 2021 to 2022, where the ratio spiked from 0.69 to 0.95, indicating a substantial increase in debt relative to the total capital employed.
The trend continued in the subsequent years, with the debt-to-capital ratio reaching 1.12 in 2023 and further escalating to 1.22 in 2024. These elevated ratios signify a higher proportion of the company's capital being funded through debt, which could indicate increased financial risk and potential challenges in meeting debt obligations.
Overall, the upward trajectory of Scotts Miracle-Gro Company's debt-to-capital ratio highlights a progression towards a more debt-heavy capital structure over the past five years, potentially impacting the company's financial flexibility and risk profile.
Peer comparison
Sep 30, 2024