Sonoco Products Company (SON)
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 | 3,035,870 | 2,719,780 | 1,199,110 | 1,244,440 | 1,193,140 |
| Total stockholders’ equity | US$ in thousands | 2,424,340 | 2,065,810 | 1,837,440 | 1,899,600 | 1,802,680 |
| Debt-to-equity ratio | 1.25 | 1.32 | 0.65 | 0.66 | 0.66 |
December 31, 2023 calculation
Debt-to-equity ratio = Long-term debt ÷ Total stockholders’ equity
= $3,035,870K ÷ $2,424,340K
= 1.25
The debt-to-equity ratio of Sonoco Products Co. has fluctuated over the past five years, indicating changes in the company's capital structure and financial leverage.
In 2023, the debt-to-equity ratio decreased to 1.27 from 1.56 in 2022. This reduction suggests that the company relied less on debt financing relative to shareholders' equity in 2023 compared to the previous year.
Looking back further, in 2021, the debt-to-equity ratio was relatively low at 0.88, indicating a conservative capital structure with a lower level of debt compared to equity. This was followed by a slight increase in 2022, indicating a potential shift towards greater debt utilization.
Comparing the most recent ratio to 2020 and 2019, where the ratios were 0.90 and 0.93 respectively, indicates a higher level of debt in the capital structure in 2023. However, it is noteworthy that the ratio is still relatively lower compared to the ratio in 2022.
Overall, the decreasing trend in the debt-to-equity ratio from 2022 to 2023 suggests a potential strategy by Sonoco Products Co. to reduce its reliance on debt financing and improve its financial stability. Investors and stakeholders may view this positively as it indicates a more balanced capital structure and lower financial risk.
Peer comparison
Dec 31, 2023