Tetra Tech Inc (TTEK)
Debt-to-assets ratio
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|
| Long-term debt | US$ in thousands | 879,529 | 246,250 | 200,000 | 242,395 | 263,934 |
| Total assets | US$ in thousands | 3,820,480 | 2,622,780 | 2,576,560 | 2,378,560 | 2,147,410 |
| Debt-to-assets ratio | 0.23 | 0.09 | 0.08 | 0.10 | 0.12 |
September 30, 2023 calculation
Debt-to-assets ratio = Long-term debt ÷ Total assets
= $879,529K ÷ $3,820,480K
= 0.23
The debt-to-assets ratio measures the proportion of a company's assets that are financed by debt. A higher ratio indicates that more of the company's assets are funded by debt, which may pose higher financial risk. On the other hand, a lower ratio implies a lower reliance on debt financing and may indicate a stronger financial position.
Analyzing Tetra Tech Inc's debt-to-assets ratio over the past five years, we observe a fluctuating trend. In 2023, the ratio increased to 0.23 from 0.09 in 2022, indicating a significant rise in the proportion of debt relative to assets. This could suggest an increased reliance on debt financing during the most recent fiscal year.
Comparing the 2023 ratio to earlier years, we can see that it is higher than the ratios in 2021, 2020, and 2019, indicating a departure from the lower debt levels observed in those periods. This shift may raise concerns about Tetra Tech's financial leverage and its ability to service its debt obligations, especially if economic conditions deteriorate.
It is essential for stakeholders to monitor Tetra Tech's debt-to-assets ratio closely in future periods to assess the company's evolving financial risk profile and its strategies for managing debt levels effectively. Additional context, such as the company's industry norms and overall financial health, would further enhance the interpretation of this ratio.
Peer comparison
Sep 30, 2023