Stryker Corporation (SYK)

Debt-to-capital ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Long-term debt	US$ in thousands	10,901,000	11,857,000	12,472,000	13,230,000	10,231,000
Total stockholders’ equity	US$ in thousands	18,593,000	16,616,000	14,877,000	13,084,000	12,807,000
Debt-to-capital ratio		0.37	0.42	0.46	0.50	0.44

December 31, 2023 calculation

Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $10,901,000K ÷ ($10,901,000K + $18,593,000K)
= 0.37

The debt-to-capital ratio of Stryker Corp. has shown a declining trend over the past five years. In 2023, the ratio decreased to 0.41 from 0.44 in 2022, indicating that the company relied less on debt to fund its operations and investments relative to its total capital structure. This reduction suggests improved financial health and lower financial risk, as the company may have reduced its debt levels or increased its equity capital.

Comparing 2023 to 2020, the debt-to-capital ratio has decreased significantly from 0.52 to 0.41, reflecting a substantial improvement in the company's leverage position. This reduction could indicate a more conservative approach to capital structure management, with the company possibly focusing on reducing debt obligations or increasing equity investments.

In the context of the 5-year period, the 2023 ratio of 0.41 represents the lowest level during this period, indicating that Stryker Corp. has made progress in optimizing its debt-to-capital ratio. However, it is important to note that while a lower debt-to-capital ratio generally signifies lower financial risk, an extremely low ratio may also indicate underutilization of debt for potentially beneficial investments. Overall, the decreasing trend in the debt-to-capital ratio implies a positive trajectory in Stryker Corp.'s financial strategy and risk management practices.