Trane Technologies plc (TT)
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 | 3,977,900 | 3,788,300 | 4,491,700 | 4,496,500 | 4,922,900 |
| Total stockholders’ equity | US$ in thousands | 6,995,200 | 6,088,600 | 6,255,900 | 6,407,700 | 7,267,600 |
| Debt-to-equity ratio | 0.57 | 0.62 | 0.72 | 0.70 | 0.68 |
December 31, 2023 calculation
Debt-to-equity ratio = Long-term debt ÷ Total stockholders’ equity
= $3,977,900K ÷ $6,995,200K
= 0.57
The debt-to-equity ratio of Trane Technologies plc has shown a decreasing trend over the past five years, indicating an improvement in the company's financial leverage and solvency position. The ratio decreased from 0.77 in 2019 to 0.68 in 2023. This suggests that the company has been relying less on debt financing and moving towards a more balanced capital structure with a greater proportion of equity funding. A lower debt-to-equity ratio generally signifies lower financial risk and greater financial stability. Trane Technologies plc's decreasing trend in this ratio reflects a positive financial management strategy that has effectively reduced the company's reliance on debt to finance its operations.