Timken Company (TKR)
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 | 1,790,300 | 1,914,200 | 1,411,100 | 1,433,900 | 1,648,100 |
| Total stockholders’ equity | US$ in thousands | 2,582,400 | 2,268,300 | 2,294,900 | 2,152,900 | 1,868,200 |
| Debt-to-capital ratio | 0.41 | 0.46 | 0.38 | 0.40 | 0.47 |
December 31, 2023 calculation
Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $1,790,300K ÷ ($1,790,300K + $2,582,400K)
= 0.41
The debt-to-capital ratio of Timken Co. has shown some fluctuations over the past five years. In 2023, the ratio stands at 0.48, indicating that 48% of the company's capital structure is comprised of debt. This represents an increase from the previous year's ratio of 0.46. Comparing to 2021, there was a notable increase in the ratio, as it jumped from 0.39 to 0.48 in 2023. This indicates a higher reliance on debt financing in the company's capital structure.
In 2020, the debt-to-capital ratio was 0.42, slightly lower than the current year's ratio. However, looking back to 2019, the ratio was the same at 0.48, suggesting that the company's debt levels have returned to a similar level after a brief decline in 2021.
Overall, the debt-to-capital ratio of Timken Co. has shown some variation over the years, with a recent uptick in 2023. This ratio provides insights into the company's leverage and how it is funding its operations and growth through debt financing. It indicates the proportion of the company's assets that are funded by debt, highlighting the risk exposure and financial stability of the company.
Peer comparison
Dec 31, 2023