Xpel Inc (XPEL)
Debt-to-equity ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Long-term debt | US$ in thousands | 19,317 | 26,000 | 25,076 | 3,568 | 307 |
| Total stockholders’ equity | US$ in thousands | 179,989 | 124,722 | 84,462 | 53,382 | 35,062 |
| Debt-to-equity ratio | 0.11 | 0.21 | 0.30 | 0.07 | 0.01 |
December 31, 2023 calculation
Debt-to-equity ratio = Long-term debt ÷ Total stockholders’ equity
= $19,317K ÷ $179,989K
= 0.11
The debt-to-equity ratio of XPEL Inc has fluctuated over the past five years, with a low of 0.02 in 2019 and a high of 0.30 in 2021. A lower ratio indicates a lower level of debt relative to equity, implying a stronger financial position and less reliance on borrowed funds for financing. In contrast, a higher ratio suggests a higher level of debt compared to equity, which may indicate higher financial risk and leverage.
The significant decrease in the debt-to-equity ratio from 0.30 in 2021 to 0.11 in 2023 indicates a reduction in the company's reliance on debt financing and a strengthening of its financial structure. This improvement could potentially enhance the company's financial stability and flexibility, as it is moving towards a more balanced capital structure.
However, it is worth noting the sharp increase in the ratio from 0.02 in 2019 to 0.30 in 2021, which may have signaled a period of increased debt usage or a decline in equity levels. This could have raised concerns about the company's financial health and ability to manage its debt obligations efficiently.
Overall, the trend in XPEL Inc's debt-to-equity ratio indicates fluctuations in its capital structure over the years, with recent improvements suggesting a more conservative approach to debt management and a stronger financial position. Monitoring this ratio is essential for assessing the company's leverage and risk profile going forward.