Valvoline Inc (VVV)
Debt-to-assets ratio
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | ||
|---|---|---|---|---|---|---|
| Long-term debt | US$ in thousands | 1,070,000 | 1,562,300 | 1,525,100 | 1,639,700 | 1,962,000 |
| Total assets | US$ in thousands | 2,438,700 | 2,889,900 | 3,416,800 | 3,191,000 | 3,051,000 |
| Debt-to-assets ratio | 0.44 | 0.54 | 0.45 | 0.51 | 0.64 |
September 30, 2024 calculation
Debt-to-assets ratio = Long-term debt ÷ Total assets
= $1,070,000K ÷ $2,438,700K
= 0.44
The debt-to-assets ratio of Valvoline Inc has exhibited a declining trend over the past five years, from 0.64 in 2020 to 0.44 in 2024. This indicates that the company's level of debt relative to its total assets has decreased over this period. A lower debt-to-assets ratio suggests that the company is relying less on debt financing to fund its operations and investments, which can be viewed positively as it points to a stronger financial position and lower financial risk.
The gradual decrease in the debt-to-assets ratio implies that Valvoline Inc has been improving its debt management and capital structure efficiency over the years. This trend may reflect prudent financial decision-making, such as reducing debt levels, refinancing debt at lower interest rates, or increasing asset utilization to lower the ratio.
However, it is important to note that the debt-to-assets ratio is just one measure of financial health and should be considered alongside other financial ratios and qualitative factors to gain a comprehensive understanding of the company's overall financial performance and risk profile.
Peer comparison
Sep 30, 2024