Worthington Industries Inc (WOR)
Debt-to-capital ratio
| May 31, 2023 | May 31, 2022 | May 31, 2021 | May 31, 2020 | May 31, 2019 | ||
|---|---|---|---|---|---|---|
| Long-term debt | US$ in thousands | 689,718 | 696,345 | 710,031 | 699,516 | 598,356 |
| Total stockholders’ equity | US$ in thousands | 1,696,010 | 1,480,750 | 1,398,190 | 820,821 | 831,246 |
| Debt-to-capital ratio | 0.29 | 0.32 | 0.34 | 0.46 | 0.42 |
May 31, 2023 calculation
Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $689,718K ÷ ($689,718K + $1,696,010K)
= 0.29
The debt-to-capital ratio for Worthington Enterprises Inc. has exhibited a decreasing trend over the past five years, indicating a positive development in the company's capital structure and financial leverage. As of May 31, 2023, the ratio stands at 0.29, which is lower than the previous year's figure of 0.33. This suggests that Worthington Enterprises has reduced its reliance on debt financing in relation to its total capital.
The declining trend in the debt-to-capital ratio implies that the company is progressively utilizing more equity to finance its operations and growth initiatives, which could lead to a stronger financial position and lower financial risk. This may be perceived favorably by investors and creditors, as it indicates a lower probability of financial distress and an improved capacity to meet its financial obligations.
The improving debt-to-capital ratio highlights Worthington Enterprises' prudent financial management and ability to maintain a balanced capital structure, which can enhance its long-term sustainability and attractiveness to stakeholders. It also indicates a potential improvement in the company's creditworthiness, which could lead to better access to capital at favorable terms. However, the company should continue to monitor and manage its debt levels effectively to ensure ongoing financial stability and flexibility.
Peer comparison
May 31, 2023