Simply Good Foods Co (SMPL)

Debt-to-capital ratio

		Aug 31, 2024	Aug 26, 2023	Aug 27, 2022	Aug 28, 2021	Aug 29, 2020
Long-term debt	US$ in thousands	397,485	281,649	403,022	451,269	596,879
Total stockholders’ equity	US$ in thousands	1,727,490	1,571,100	1,438,660	1,188,800	1,139,330
Debt-to-capital ratio		0.19	0.15	0.22	0.28	0.34

August 31, 2024 calculation

Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $397,485K ÷ ($397,485K + $1,727,490K)
= 0.19

The debt-to-capital ratio of Simply Good Foods Co has fluctuated over the last five years, indicating varying levels of debt relative to total capital within the company. The ratio has demonstrated a downward trend from 0.34 in Aug 29, 2020, to 0.19 in Aug 31, 2024. This suggests that the company has been reducing its reliance on debt financing compared to its total capital over the years.

A lower debt-to-capital ratio generally indicates a lower financial risk for the company, as it signifies a smaller proportion of debt in the capital structure. This can be viewed positively by investors and creditors, as it implies a stronger ability to handle financial obligations and potential downturns in the business environment.

The decreasing trend in the debt-to-capital ratio may indicate that Simply Good Foods Co has been managing its debt levels effectively or potentially growing its equity base. However, it is essential to further investigate the reasons behind this trend to understand the company's overall financial health and strategy regarding capital structure management.