Trane Technologies plc (TT)
Debt-to-equity 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-equity ratio | 0.58 | 0.57 | 0.62 | 0.72 | 0.70 |
December 31, 2024 calculation
Debt-to-equity ratio = Long-term debt ÷ Total stockholders’ equity
= $4,318,100K ÷ $7,457,400K
= 0.58
Trane Technologies plc's debt-to-equity ratio has exhibited a gradual decrease over the past five years, from 0.70 as of December 31, 2020, to 0.58 as of December 31, 2024. This downward trend indicates a reduction in the proportion of debt relative to equity in the company's capital structure. A lower debt-to-equity ratio signifies that Trane Technologies plc is relying less on borrowing to finance its operations and investments and is, therefore, less leveraged. This may imply a stronger financial position and lower financial risk for the company, as it has a higher equity cushion to support its activities. Overall, the declining trend in the debt-to-equity ratio for Trane Technologies plc suggests a prudent approach to managing its financial leverage over the analyzed period.