Verisk Analytics Inc (VRSK)

Debt-to-capital ratio

Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Long-term debt US$ in thousands 2,833,700 2,342,600 2,692,000 3,140,800 2,650,400
Total stockholders’ equity US$ in thousands 310,000 1,749,300 2,816,500 2,698,200 2,260,800
Debt-to-capital ratio 0.90 0.57 0.49 0.54 0.54

December 31, 2023 calculation

Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $2,833,700K ÷ ($2,833,700K + $310,000K)
= 0.90

Verisk Analytics Inc's debt-to-capital ratio has shown an increasing trend over the past five years, with the ratio standing at 0.90 in 2023, compared to 0.68 in 2022, 0.54 in both 2021 and 2020, and 0.58 in 2019. This indicates that the company's reliance on debt financing relative to its total capital has been rising steadily.

A debt-to-capital ratio of 0.90 in 2023 suggests that Verisk Analytics Inc finances approximately 90% of its capital structure through debt, while the remaining 10% is financed through equity. This implies a higher level of financial leverage, which can magnify returns for shareholders in favorable economic conditions but also increases the risk in times of financial distress.

It is important for investors and stakeholders to monitor this trend closely, as a continued increase in the debt-to-capital ratio may indicate heightened financial risk for the company. Verisk Analytics Inc should carefully manage its debt levels to ensure a healthy balance between debt and equity financing, maintaining financial stability and flexibility for sustainable growth and value creation over the long term.