Cactus Inc (WHD)
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 | — | 0 | — | — | — |
| Total stockholders’ equity | US$ in thousands | 865,522 | 571,917 | 468,644 | 352,970 | 327,466 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
December 31, 2023 calculation
Debt-to-equity ratio = Long-term debt ÷ Total stockholders’ equity
= $—K ÷ $865,522K
= 0.00
The debt-to-equity ratio for Cactus Inc has consistently been 0.00 for the past five years, indicating that the company has not utilized any debt to finance its operations relative to its equity. A debt-to-equity ratio of 0.00 signifies that the company's total liabilities are equal to zero or are negligible compared to its total equity. This may suggest that Cactus Inc has been operating primarily with funds derived from equity sources, such as shareholders' investments or retained earnings, rather than relying on external borrowing.
Maintaining a low or zero debt-to-equity ratio can be advantageous as it indicates lower financial risk and less dependence on borrowed funds, reducing interest expenses and potential financial distress in the event of economic downturns. However, it is essential to consider that a very low debt-to-equity ratio may also imply missed opportunities for leveraging debt to finance growth or take advantage of tax benefits associated with interest payments.
Overall, based on the consistent trend of a 0.00 debt-to-equity ratio over the past five years, it appears that Cactus Inc has been following a conservative financial approach with a focus on equity financing to support its operations and growth.
Peer comparison
Dec 31, 2023