Trex Company Inc (TREX)
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 | 716,671 | 518,349 | 725,034 | 588,531 | 449,175 |
| 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 + $716,671K)
= 0.00
The debt-to-capital ratio of TREX Co., Inc. has shown significant fluctuations over the past five years. In 2019, the company had a debt-to-capital ratio of 0.00, indicating that there was no debt relative to its total capital. This suggests a strong financial position with low leverage.
However, in 2020 and 2021, the debt-to-capital ratio remained at 0.00, indicating that there was still no debt in the company's capital structure. This may signify a conservative approach to financing and a reliance on equity rather than debt.
The ratio then increased significantly to 0.30 in 2022. This indicates that the company took on debt, which formed 30% of its total capital. This change may have been driven by a strategic decision to leverage debt to fund expansions, investments, or other growth initiatives.
In 2023, the debt-to-capital ratio dropped sharply to 0.01, signaling a reduction in debt relative to total capital. This decrease may be due to debt repayments, improved financial performance, or a shift towards more equity financing.
Overall, the fluctuation in TREX Co., Inc.'s debt-to-capital ratio suggests varying levels of indebtedness and financial leverage over the years. It is essential for stakeholders to closely monitor these changes to assess the company's financial health and risk profile.
Peer comparison
Dec 31, 2023