Advanced Drainage Systems Inc (WMS)
Debt-to-capital ratio
| Mar 31, 2024 | Mar 31, 2023 | Mar 31, 2022 | Mar 31, 2021 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|
| Long-term debt | US$ in thousands | 1,259,520 | 1,269,390 | 908,705 | 782,220 | 1,089,370 |
| Total stockholders’ equity | US$ in thousands | 1,153,310 | 824,147 | 893,039 | 819,784 | 525,723 |
| Debt-to-capital ratio | 0.52 | 0.61 | 0.50 | 0.49 | 0.67 |
March 31, 2024 calculation
Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $1,259,520K ÷ ($1,259,520K + $1,153,310K)
= 0.52
The debt-to-capital ratio of Advanced Drainage Systems Inc has shown fluctuations over the past five years. As of March 31, 2024, the ratio stands at 0.52, indicating that 52% of the company's capital structure is comprised of debt. This represents a decrease from the previous year, where the ratio was at 0.61.
In the past five years, the company experienced variations in its debt-to-capital ratio, ranging from 0.49 to 0.67. The downward trend in the ratio from 2020 to 2024 suggests a reduction in the proportion of debt relative to the total capital employed by the company.
Overall, the decreasing trend in the debt-to-capital ratio could signify a conservative approach towards managing debt levels, potentially reducing financial risk and enhancing the company's financial stability. Further analysis of the company's debt management strategies and capital structure changes would provide deeper insights into its financial health and risk profile.