TRI Pointe Homes Inc (TPH)
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 | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 3,010,960 | 2,832,390 | 2,447,620 | 2,232,540 | 2,186,530 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
December 31, 2023 calculation
Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $—K ÷ ($—K + $3,010,960K)
= 0.00
The debt-to-capital ratio of Tri Pointe Homes Inc. has shown a decreasing trend from 0.37 in 2019 to 0.31 in 2023. This ratio indicates the proportion of the company's capital structure that is financed by debt. A lower debt-to-capital ratio suggests that the company relies less on debt to fund its operations and investments, which may lower its financial risk.
The gradual decline in the debt-to-capital ratio over the five-year period reflects a more conservative approach to financing, as the company has been reducing its reliance on debt compared to its total capital. This could be seen as a positive sign, indicating improved financial stability and potentially lower interest expenses.
However, it is important to consider that a lower debt-to-capital ratio could also mean reduced leverage which might limit the company's ability to capitalize on growth opportunities. Overall, maintaining a balanced debt-to-capital ratio is essential for Tri Pointe Homes Inc. to effectively manage its financial risk and support its strategic objectives.
Peer comparison
Dec 31, 2023