Unifirst Corporation (UNF)
Debt-to-capital ratio
| Aug 26, 2023 | Aug 27, 2022 | Aug 28, 2021 | Aug 29, 2020 | Aug 31, 2019 | ||
|---|---|---|---|---|---|---|
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 2,003,960 | 1,915,870 | 1,872,950 | 1,741,130 | 1,641,230 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
August 26, 2023 calculation
Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $—K ÷ ($—K + $2,003,960K)
= 0.00
The debt-to-capital ratio measures the proportion of a company's capital that is financed through debt. It is calculated by dividing total debt by the sum of total debt and total equity. A higher ratio indicates higher leverage and potential financial risk, while a lower ratio suggests a more conservative capital structure.
The data provided for Unifirst Corp. shows a debt-to-capital ratio of 0.00 for the years from 2019 to 2023. A ratio of 0.00 typically indicates that the company has not utilized any debt financing in its capital structure. It implies that the company's capital structure is primarily composed of equity, which can be considered a conservative approach to financing operations and expansion.
A consistent 0.00 debt-to-capital ratio over the years may indicate that Unifirst Corp. has maintained a conservative financial strategy, relying on internal financing or equity issuance to fund its operations and growth. This approach may be viewed positively by investors and creditors, as it signifies a lower risk of financial distress due to debt repayment obligations.
However, it's important to note that a 0.00 debt-to-capital ratio does not provide a complete picture of the company's financial health. It's crucial to consider the context, such as the industry's typical capital structure, interest rates, and the company's growth plans, to fully understand the implications of this ratio.
In conclusion, based on the data provided, Unifirst Corp. has maintained a debt-to-capital ratio of 0.00 over the past five years, indicating a conservative capital structure with limited reliance on debt financing. This approach can have both advantages and potential limitations depending on the overall business strategy and financial environment.
Peer comparison
Aug 26, 2023