Teradata Corp (TDC)
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 | 480,000 | 498,000 | 324,000 | 411,000 | 454,000 |
| Total stockholders’ equity | US$ in thousands | 135,000 | 258,000 | 460,000 | 400,000 | 262,000 |
| Debt-to-capital ratio | 0.78 | 0.66 | 0.41 | 0.51 | 0.63 |
December 31, 2023 calculation
Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $480,000K ÷ ($480,000K + $135,000K)
= 0.78
The debt-to-capital ratio of Teradata Corp has displayed fluctuations over the past five years. In 2023, the ratio increased to 0.82 from 0.71 in 2022, indicating that debt represented 82% of the company's capital structure. This rise in the ratio suggests an increased reliance on debt financing compared to the previous year.
Furthermore, comparing the current ratio to earlier years, we observe a significant upward trend since 2021 when it stood at 0.54. This indicates a gradual shift towards a higher proportion of debt in the capital structure of Teradata Corp over the last three years.
However, it is worth noting that the ratio in 2023 is still below the 2019 level of 0.70, which suggests that the company had previously operated with a higher proportion of debt relative to capital.
Overall, the increasing trend in the debt-to-capital ratio of Teradata Corp may point towards a strategic decision to leverage more debt to fund operations or investments, which can potentially lead to increased financial risk but also higher returns if managed effectively.
Peer comparison
Dec 31, 2023