Tractor Supply Company (TSCO)
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 | 1,728,960 | 1,164,060 | 986,382 | 984,324 | 366,480 |
| Total stockholders’ equity | US$ in thousands | 2,149,760 | 2,042,420 | 2,002,660 | 1,923,840 | 1,567,120 |
| Debt-to-equity ratio | 0.80 | 0.57 | 0.49 | 0.51 | 0.23 |
December 31, 2023 calculation
Debt-to-equity ratio = Long-term debt ÷ Total stockholders’ equity
= $1,728,960K ÷ $2,149,760K
= 0.80
The debt-to-equity ratio of Tractor Supply Company has displayed an upward trend over the past five years, indicating an increasing reliance on debt financing relative to equity. In 2019, the ratio was at its lowest point of 0.23, suggesting a conservative capital structure with a higher proportion of equity. Subsequently, there was a significant increase in 2020 to 0.51, followed by further rises in 2021, 2022, and 2023.
The ratio of 0.80 at the end of 2023 reflects that the company's level of debt in relation to equity has risen to 0.80, indicating that for every dollar of equity, there is $0.80 of debt. This increase may imply higher financial risk and potential concerns for creditors, as a higher ratio suggests a greater reliance on borrowed funds to finance operations and growth.
It is essential for investors and stakeholders to closely monitor Tractor Supply Company's debt levels and assess the company's ability to service its debt obligations, maintain profitability, and sustain growth in light of its evolving capital structure.
Peer comparison
Dec 31, 2023