Snap-On Inc (SNA)
Debt-to-equity ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Long-term debt | US$ in thousands | 1,184,600 | 1,183,800 | 1,182,900 | 1,182,100 | 946,900 |
| Total stockholders’ equity | US$ in thousands | 5,071,300 | 4,481,300 | 4,181,900 | 3,824,900 | 3,409,100 |
| Debt-to-equity ratio | 0.23 | 0.26 | 0.28 | 0.31 | 0.28 |
December 31, 2023 calculation
Debt-to-equity ratio = Long-term debt ÷ Total stockholders’ equity
= $1,184,600K ÷ $5,071,300K
= 0.23
The debt-to-equity ratio of Snap-On Inc has exhibited a decreasing trend over the past five years, indicating a relatively lower reliance on debt compared to equity in financing its operations. This trend suggests a strong financial position and prudent capital structure management by the company.
In particular, the ratio decreased from 0.28 in 2021 to 0.23 in 2023, showing a notable improvement in the company's debt-to-equity position. This reduction can be a result of either a decrease in debt levels, an increase in equity, or a combination of both factors.
A lower debt-to-equity ratio generally signifies a lower financial risk as it implies that the company is using less debt to finance its operations, which may lead to lower interest expenses and a higher capacity to withstand economic downturns.
Although the trend of decreasing debt-to-equity ratio is positive, it is essential to assess the ratio in conjunction with other financial metrics to gain a comprehensive understanding of Snap-On Inc's overall financial health and risk profile.
Peer comparison
Dec 31, 2023