Trane Technologies plc (TT)
Debt-to-capital ratio
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Long-term debt | US$ in thousands | 4,318,100 | 3,977,900 | 3,788,300 | 4,491,700 | 4,496,500 |
| Total stockholders’ equity | US$ in thousands | 7,457,400 | 6,995,200 | 6,088,600 | 6,255,900 | 6,407,700 |
| Debt-to-capital ratio | 0.37 | 0.36 | 0.38 | 0.42 | 0.41 |
December 31, 2024 calculation
Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $4,318,100K ÷ ($4,318,100K + $7,457,400K)
= 0.37
Trane Technologies plc's debt-to-capital ratio has shown a declining trend over the past five years, starting at 0.41 in December 2020 and decreasing gradually to 0.37 by December 2024. This indicates that the company has been effectively managing its debt levels in relation to its total capital structure. A lower debt-to-capital ratio generally suggests a lower financial risk and greater financial stability for the company. Despite a slight increase in 2021, the subsequent years witnessed a consistent improvement in the company's capital structure efficiency. Overall, Trane Technologies plc appears to have a prudent approach towards managing its debt obligations relative to its overall capital base.