Waste Management Inc (WM)
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 | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 6,903,000 | 6,849,000 | 7,124,000 | 7,452,000 | 7,068,000 |
| 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 ÷ $6,903,000K
= 0.00
The debt-to-equity ratio of Waste Management, Inc. has shown an increasing trend over the past five years. In 2023, the ratio stands at 2.35, indicating that for every dollar of equity, the company has $2.35 of debt. This represents a higher level of leverage compared to the previous years, where the ratio ranged from 1.85 to 1.91.
The rising trend in the debt-to-equity ratio suggests that Waste Management, Inc. has been relying more on debt financing to support its operations and growth. While this can potentially amplify returns for shareholders through leveraging, it also increases the company's financial risk as higher debt levels typically lead to increased interest payments and debt obligations.
It is important for investors and stakeholders to monitor this trend in the debt-to-equity ratio to assess the company's financial health and risk profile. High levels of debt relative to equity could indicate potential challenges in meeting debt obligations or in generating sufficient earnings to cover interest expenses in the long term.
Peer comparison
Dec 31, 2023