Timken Company (TKR)
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 | 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-equity ratio | 0.69 | 0.84 | 0.61 | 0.67 | 0.88 |
December 31, 2023 calculation
Debt-to-equity ratio = Long-term debt ÷ Total stockholders’ equity
= $1,790,300K ÷ $2,582,400K
= 0.69
The debt-to-equity ratio of Timken Co. has shown fluctuations over the past five years. In 2023, the ratio increased to 0.93 from 0.87 in 2022, indicating a higher level of debt relative to equity. This suggests that the company relied more on debt financing compared to equity financing in 2023.
Comparing 2023 to 2021, we observe a notable increase in the ratio from 0.64 to 0.93, signifying a significant rise in debt relative to equity. This could imply a shift in the company's capital structure towards more debt financing during this period.
However, when comparing 2023 to 2020 and 2019, we see that the ratio decreased from 0.73 and returned to the same level of 0.93 in 2019. This fluctuation indicates varying levels of leverage and financial risk over these years.
In conclusion, the debt-to-equity ratio of Timken Co. has varied over the past five years, with 2023 showing an increase in leverage compared to previous years. This trend suggests a need for further analysis of the company's debt management and capital structure decisions.
Peer comparison
Dec 31, 2023