Terex Corporation (TEX)
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 | — | 773,600 | 668,500 | 1,166,200 | 1,168,800 |
| Total stockholders’ equity | US$ in thousands | 1,672,300 | 1,181,200 | 1,109,600 | 921,500 | 932,300 |
| Debt-to-capital ratio | 0.00 | 0.40 | 0.38 | 0.56 | 0.56 |
December 31, 2023 calculation
Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $—K ÷ ($—K + $1,672,300K)
= 0.00
The debt-to-capital ratio of Terex Corp. has shown a decreasing trend over the past five years, indicating a potentially improving financial position in terms of leverage.
In 2019 and 2020, the debt-to-capital ratio was consistent at 0.56, suggesting the company had a relatively high level of debt compared to its capital structure. However, from 2021 onwards, there was a noticeable decline in the ratio, dropping to 0.38 in 2021, 0.40 in 2022, and further decreasing to 0.27 by the end of 2023.
This declining trend implies that Terex Corp. has been reducing its reliance on debt financing in relation to its capital base, which can be a positive indicator of improved financial stability and potentially lower financial risk. Lower debt-to-capital ratios generally indicate a healthier balance sheet and may also reflect improved overall solvency and creditworthiness.
Overall, the decreasing trend in Terex Corp.'s debt-to-capital ratio over the past five years suggests a positive shift towards a more sustainable capital structure, potentially enhancing the company's financial health and resilience.