Wolfspeed Inc (WOLF)

Debt-to-equity ratio

		Jun 30, 2024	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020
Long-term debt	US$ in thousands	6,161,100	4,175,100	1,021,600	823,900	783,800
Total stockholders’ equity	US$ in thousands	882,100	1,621,900	2,439,300	2,116,500	2,083,100
Debt-to-equity ratio		6.98	2.57	0.42	0.39	0.38

June 30, 2024 calculation

Debt-to-equity ratio = Long-term debt ÷ Total stockholders’ equity
= $6,161,100K ÷ $882,100K
= 6.98

The debt-to-equity ratio of Wolfspeed Inc has fluctuated over the past five years, indicating changes in the company's capital structure. The ratio increased significantly from 0.38 in 2020 to 6.98 in 2024, suggesting a substantial rise in debt relative to equity. This could imply that the company has taken on more debt to finance its operations, investments, or acquisitions during this period.

The sharp increase in the debt-to-equity ratio may indicate a higher financial risk for the company, as a higher ratio implies a greater reliance on debt financing compared to equity. Investors and stakeholders may view a high debt-to-equity ratio as a red flag, as it could potentially lead to financial instability or difficulties in meeting debt obligations.

It is important for Wolfspeed Inc to carefully manage its debt levels to maintain a healthy balance between debt and equity. Monitoring the trend of the debt-to-equity ratio over time can provide valuable insights into the company's financial health and its ability to sustain long-term growth and profitability.