The Wendy’s Co (WEN)
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 | 2,732,810 | 2,822,200 | 2,356,420 | 2,218,160 | 2,257,560 |
| Total stockholders’ equity | US$ in thousands | 309,779 | 465,720 | 436,405 | 549,596 | 516,359 |
| Debt-to-capital ratio | 0.90 | 0.86 | 0.84 | 0.80 | 0.81 |
December 31, 2023 calculation
Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $2,732,810K ÷ ($2,732,810K + $309,779K)
= 0.90
The debt-to-capital ratio of Wendy's Co has been gradually increasing over the past five years, from 0.84 in December 2019 to 0.92 in December 2023. This indicates that the company has been relying more on debt to finance its operations and investments relative to its total capital structure.
The increasing trend in the debt-to-capital ratio may raise concerns among investors and creditors about the company's financial risk and leverage. It suggests that Wendy's Co's debt levels have been growing at a faster pace compared to its equity, which could potentially lead to higher interest expenses and financial constraints in the future.
It is important for Wendy's Co to carefully manage its debt levels and balance them with equity to maintain a healthy capital structure. Monitoring the trend of the debt-to-capital ratio over time can provide insights into the company's financial health and its ability to meet its financial obligations.
Peer comparison
Dec 31, 2023