Trinity Industries Inc (TRN)
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 | 5,542,300 | 387,500 | 5,281,900 | 5,254,800 | 5,064,600 |
| Total stockholders’ equity | US$ in thousands | 1,037,100 | 1,012,400 | 1,029,800 | 1,738,800 | 2,030,100 |
| Debt-to-equity ratio | 5.34 | 0.38 | 5.13 | 3.02 | 2.49 |
December 31, 2023 calculation
Debt-to-equity ratio = Long-term debt ÷ Total stockholders’ equity
= $5,542,300K ÷ $1,037,100K
= 5.34
The debt-to-equity ratio of Trinity Industries, Inc. has been steadily increasing over the past five years, indicating a higher reliance on debt financing compared to equity financing.
The ratio increased from 2.40 in 2019 to 5.55 in 2023, reflecting a significant rise in the company's debt burden relative to its equity. This trend suggests that Trinity Industries has been taking on more debt to fund its operations, investments, or acquisitions.
The company's debt-to-equity ratio surpassed 5.00 in 2021 and has remained above this level since then, signaling a substantial amount of debt in relation to shareholder equity. This high debt-to-equity ratio may raise concerns about the company's financial risk and leverage.
Investors and creditors closely monitor the debt-to-equity ratio as a measure of a company's financial health and solvency. A continuously increasing ratio may indicate potential liquidity challenges or an elevated risk of default, as the company may struggle to meet its debt obligations.
Trinity Industries should carefully manage its debt levels and ensure that it can comfortably service its debt payments to maintain a healthy financial position and safeguard its long-term sustainability.
Peer comparison
Dec 31, 2023