Valaris Ltd (VAL)
Debt-to-capital ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Long-term debt | US$ in thousands | 1,079,300 | 542,400 | 0 | 5,923,500 | 5,010,400 |
| Total stockholders’ equity | US$ in thousands | 1,987,600 | 1,289,900 | 4,374,600 | 9,310,900 | 8,091,400 |
| Debt-to-capital ratio | 0.35 | 0.30 | 0.00 | 0.39 | 0.38 |
December 31, 2023 calculation
Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $1,079,300K ÷ ($1,079,300K + $1,987,600K)
= 0.35
Valaris Ltd's debt-to-capital ratio has shown some fluctuations over the past three years. As of December 31, 2023, the debt-to-capital ratio stands at 0.35, representing an increase from the previous year's ratio of 0.30 but remaining relatively consistent compared to the ratio of 0.34 in 2021.
A debt-to-capital ratio of 0.35 indicates that 35% of Valaris Ltd's capital structure is financed by debt, while the remaining 65% is funded by equity. This suggests that the company relies moderately on debt to finance its operations and growth initiatives.
It is crucial for investors and stakeholders to closely monitor changes in the debt-to-capital ratio as higher levels of debt could potentially increase financial risk due to interest obligations and repayment constraints. Understanding the company's ability to manage its debt levels and maintain a healthy balance between debt and equity financing is key to evaluating Valaris Ltd's financial health and sustainability in the long term.
Peer comparison
Dec 31, 2023