Watsco Inc (WSO)
Debt-to-capital ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Long-term debt | US$ in thousands | 15,400 | 0 | 89,000 | 0 | 157,709 |
| Total stockholders’ equity | US$ in thousands | 2,229,840 | 1,889,240 | 1,664,950 | 1,486,680 | 1,435,430 |
| Debt-to-capital ratio | 0.01 | 0.00 | 0.05 | 0.00 | 0.10 |
December 31, 2023 calculation
Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $15,400K ÷ ($15,400K + $2,229,840K)
= 0.01
The debt-to-capital ratio of Watsco Inc. has fluctuated over the past five years. In 2023, the ratio stood at 0.05, indicating that only 5% of the company's capital structure was comprised of debt. This represents a decrease from the previous year when the ratio was 0.08.
Comparing to 2021, the debt-to-capital ratio has shown a significant decline from 0.10 to 0.05 in 2023. In 2020, the ratio was also at 0.05, similar to the current year, suggesting a stable capital structure in those years.
However, there was a notable increase in the debt-to-capital ratio in 2019, reaching 0.14, which may indicate a higher reliance on debt financing in that particular year.
Overall, the downward trend in the debt-to-capital ratio from 2021 to 2023 suggests that Watsco Inc. has been reducing its debt relative to its total capital over the past few years, potentially strengthening its financial position and reducing financial risk.