WESCO International Inc (WCC)
Debt-to-equity ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Long-term debt | US$ in thousands | 5,313,100 | 5,346,000 | 4,701,540 | 4,369,950 | 1,257,070 |
| Total stockholders’ equity | US$ in thousands | 5,037,100 | 4,454,200 | 3,782,520 | 3,343,720 | 2,265,480 |
| Debt-to-equity ratio | 1.05 | 1.20 | 1.24 | 1.31 | 0.55 |
December 31, 2023 calculation
Debt-to-equity ratio = Long-term debt ÷ Total stockholders’ equity
= $5,313,100K ÷ $5,037,100K
= 1.05
The debt-to-equity ratio of Wesco International, Inc. has fluctuated over the past five years, indicating varying levels of debt relative to equity in the company's capital structure.
In 2019, the company had a relatively low debt-to-equity ratio of 0.57, suggesting that it had a higher proportion of equity compared to debt. This may indicate a conservative approach to financing, which could be viewed positively by investors and lenders due to lower financial risk.
However, in the subsequent years, the debt-to-equity ratio increased, reaching its peak at 1.47 in 2020. This significant spike suggests that the company took on more debt relative to equity, potentially to fund growth initiatives, acquisitions, or other strategic investments. While higher debt can amplify returns during periods of growth, it also increases financial risk as the company becomes more leveraged.
Subsequently, the ratio decreased in 2021 and 2022 but remained above 1, indicating that the company still had more debt than equity in its capital structure. The latest reported ratio in 2023 stands at 1.06, signifying a slight improvement from the previous year but still indicating a higher reliance on debt financing.
Overall, the trend in the debt-to-equity ratio for Wesco International, Inc. reflects a mix of financing strategies over the years, with periods of higher and lower leverage. Investors and analysts may want to further investigate the reasons behind these fluctuations and assess the company's ability to manage its debt levels effectively while maintaining financial stability.
Peer comparison
Dec 31, 2023