Standard Motor Products Inc (SMP)
Debt-to-capital ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Long-term debt | US$ in thousands | 151,182 | 184,589 | 21 | 97 | 129 |
| Total stockholders’ equity | US$ in thousands | 635,064 | 610,020 | 601,580 | 550,236 | 504,228 |
| Debt-to-capital ratio | 0.19 | 0.23 | 0.00 | 0.00 | 0.00 |
December 31, 2023 calculation
Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $151,182K ÷ ($151,182K + $635,064K)
= 0.19
Standard Motor Products, Inc.'s debt-to-capital ratio has fluctuated over the past five years. The ratio was at its highest in 2022 at 0.28, indicating that 28% of the company's capital was financed through debt. In 2023, the ratio decreased to 0.20, suggesting an improvement in the company's debt management as only 20% of the capital was sourced from debt.
The significant decrease from 2022 to 2023 might signal that the company has reduced its reliance on debt financing, which could be viewed positively by investors and creditors. However, the ratio is still higher compared to 2021 and 2019, when it stood at 0.18 and 0.10, respectively. The exceptionally low ratio of 0.02 in 2020 indicates that year as an outlier where debt played a minimal role in the company's capital structure.
Overall, a decreasing trend in the debt-to-capital ratio indicates a positive shift towards a more conservative capital structure. However, further analysis of the company's debt levels, profitability, and cash flow is necessary to fully assess the impact of debt on Standard Motor Products, Inc.'s financial health.
Peer comparison
Dec 31, 2023