Semtech Corporation (SMTC)

Debt-to-assets ratio

		Jan 28, 2024	Jan 29, 2023	Jan 30, 2022	Jan 31, 2021	Jan 26, 2020
Long-term debt	US$ in thousands	1,371,040	1,296,970	171,676	179,195	194,743
Total assets	US$ in thousands	1,373,740	2,569,630	1,130,910	1,082,100	1,052,430
Debt-to-assets ratio		1.00	0.50	0.15	0.17	0.19

January 28, 2024 calculation

Debt-to-assets ratio = Long-term debt ÷ Total assets
= $1,371,040K ÷ $1,373,740K
= 1.00

The debt-to-assets ratio of Semtech Corporation has been fluctuating over the past five years, as indicated in the table. As of January 28, 2024, the ratio stands at 1.00, implying that the company's total debt is equal to its total assets. This significant increase from the previous year's ratio of 0.50 suggests a substantial rise in debt relative to assets.

Comparing this current ratio to historical data, it is notably higher than in previous years, such as the ratios of 0.15, 0.17, and 0.19 for the years 2022, 2021, and 2020 respectively. This trend indicates a potential shift in the company's capital structure towards a more debt-heavy position.

A debt-to-assets ratio of 1.00 can be concerning as it indicates that the company's debt levels are equal to its total assets, which may signify high financial leverage. Investors and creditors may view this ratio as risky, as a higher debt-to-assets ratio suggests a higher level of financial risk and potential difficulty in meeting debt obligations.

It would be essential for Semtech Corporation to closely monitor its debt levels and assess its ability to manage debt repayment obligations to maintain a healthy financial position and ensure long-term sustainability.