The Wendy’s Co (WEN)
Debt-to-capital ratio
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Long-term debt | US$ in thousands | 2,732,810 | 2,768,230 | 2,781,100 | 2,786,490 | 2,822,200 | 2,827,490 | 2,832,790 | 2,836,840 | 2,356,420 | 2,360,760 | 2,373,610 | 2,205,650 | 2,218,160 | 2,226,240 | 2,238,700 | 2,244,930 | 2,257,560 | 2,270,870 | 2,274,970 | 2,301,560 |
| Total stockholders’ equity | US$ in thousands | 309,779 | 342,564 | 391,115 | 419,557 | 465,720 | 437,379 | 422,863 | 454,535 | 436,405 | 542,754 | 570,356 | 520,665 | 549,596 | 521,535 | 483,983 | 451,075 | 516,359 | 649,591 | 648,048 | 640,694 |
| Debt-to-capital ratio | 0.90 | 0.89 | 0.88 | 0.87 | 0.86 | 0.87 | 0.87 | 0.86 | 0.84 | 0.81 | 0.81 | 0.81 | 0.80 | 0.81 | 0.82 | 0.83 | 0.81 | 0.78 | 0.78 | 0.78 |
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 relatively stable in the range of 0.88 to 0.92 over the past eight quarters. This ratio reflects the proportion of the company's capital structure that is financed by debt as opposed to equity. A higher debt-to-capital ratio indicates a higher level of debt relative to equity in the company's capital structure.
Wendy's Co's increasing debt-to-capital ratio over the quarters suggests that the company has been relying more on debt to finance its operations or investments compared to equity. However, it is essential to consider the industry norms and the company's financial strategy in interpreting this ratio. A higher debt-to-capital ratio may indicate higher financial leverage, which could amplify returns but also increase financial risk.
Overall, the consistent range of the debt-to-capital ratio for Wendy's Co suggests a relatively balanced capital structure with a moderate level of debt. Investors and analysts should continue to monitor this ratio along with other financial metrics to assess the company's financial health and risk profile.
Peer comparison
Dec 31, 2023