Trane Technologies plc (TT)
Debt-to-assets ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Long-term debt | US$ in thousands | 3,977,900 | 3,788,300 | 4,491,700 | 4,496,500 | 4,922,900 |
| Total assets | US$ in thousands | 19,391,900 | 18,081,600 | 18,059,800 | 18,156,700 | 20,492,300 |
| Debt-to-assets ratio | 0.21 | 0.21 | 0.25 | 0.25 | 0.24 |
December 31, 2023 calculation
Debt-to-assets ratio = Long-term debt ÷ Total assets
= $3,977,900K ÷ $19,391,900K
= 0.21
The debt-to-assets ratio of Trane Technologies plc has demonstrated a relatively consistent downward trend over the past five years. As of December 31, 2023, the ratio stands at 0.25, indicating that the company's debt accounts for 25% of its total assets. This suggests a favorable position in terms of financial leverage, as a lower ratio typically indicates lower financial risk and an ability to cover debts using assets.
The slight decrease in the debt-to-assets ratio from the previous year is a positive sign as it shows the company may be effectively managing its debt levels in relation to its asset base. It is important to monitor this ratio over time to ensure that the company maintains a healthy balance between debt and assets to support sustainable growth and financial stability. Overall, the downward trend in the debt-to-assets ratio reflects a relatively sound financial position for Trane Technologies plc.