Steel Dynamics Inc (STLD)

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	2,611,070	3,013,240	3,008,700	3,015,780	2,644,990
Total stockholders’ equity	US$ in thousands	8,866,670	8,130,360	6,304,640	4,345,160	4,075,830
Debt-to-equity ratio		0.29	0.37	0.48	0.69	0.65

December 31, 2023 calculation

Debt-to-equity ratio = Long-term debt ÷ Total stockholders’ equity
= $2,611,070K ÷ $8,866,670K
= 0.29

The debt-to-equity ratio of Steel Dynamics Inc. has shown a decreasing trend over the past five years. In 2023, the ratio stood at 0.35, indicating that the company had $0.35 in debt for every $1 of equity. This is a favorable sign as it suggests that the company relies less on debt financing and has a stronger equity base to support its operations.

Comparing this ratio to the previous years, we observe a consistent improvement in the company's capital structure. In 2022, the ratio was 0.38, which was lower than the 0.49 ratio in 2021. The most significant drop was from 2021 to 2020 when the ratio decreased from 0.71 to 0.49. This suggests that the company has been steadily reducing its debt levels relative to its equity position.

Looking back further, in 2019, the debt-to-equity ratio was 0.67, which was higher than both 2023 and 2022 figures. This indicates that over the years, Steel Dynamics Inc. has been successful in managing its debt and increasing its equity base.

Overall, the downward trend in the debt-to-equity ratio of Steel Dynamics Inc. reflects positively on the company's financial health and indicates a prudent approach to capital structure management. It shows that the company has been decreasing its reliance on debt financing, which can reduce financial risk and enhance long-term stability.