Advanced Drainage Systems Inc (WMS)
Debt-to-equity 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-equity ratio | 1.09 | 1.54 | 1.02 | 0.95 | 2.07 |
March 31, 2024 calculation
Debt-to-equity ratio = Long-term debt ÷ Total stockholders’ equity
= $1,259,520K ÷ $1,153,310K
= 1.09
The debt-to-equity ratio of Advanced Drainage Systems Inc has fluctuated over the past five years. In fiscal year 2020, the company had a high debt-to-equity ratio of 2.07, indicating a higher reliance on debt financing compared to equity. This high ratio may have raised concerns about the company's financial leverage and ability to service its debt obligations.
However, in subsequent years, the company managed to reduce its debt-to-equity ratio. By fiscal year 2022, the ratio decreased to 1.02, reflecting a more balanced capital structure with a lower level of debt relative to equity. This might suggest improved financial stability and a decreased risk of default.
In the most recent fiscal year 2024, the debt-to-equity ratio increased slightly to 1.09, indicating a moderate increase in debt relative to equity. While this ratio is still lower than the peak seen in 2020, it suggests that Advanced Drainage Systems Inc may have taken on additional debt for strategic growth or operational needs.
Overall, the trend of decreasing debt-to-equity ratio from 2020 to 2022 followed by a slight increase in 2024 indicates that the company has been actively managing its debt levels and capital structure. Investors and analysts may want to monitor future changes in this ratio to assess the company's financial health and risk profile.