Zurn Elkay Water Solutions Corporation (ZWS)
Debt-to-assets ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Mar 31, 2020 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|
| Long-term debt | US$ in thousands | 494,400 | 530,200 | 533,900 | 1,397,000 | 1,236,800 |
| Total assets | US$ in thousands | 2,667,000 | 2,864,000 | 1,077,700 | 3,627,100 | 3,259,700 |
| Debt-to-assets ratio | 0.19 | 0.19 | 0.50 | 0.39 | 0.38 |
December 31, 2023 calculation
Debt-to-assets ratio = Long-term debt ÷ Total assets
= $494,400K ÷ $2,667,000K
= 0.19
The debt-to-assets ratio of Zurn Elkay Water Solutions Corporation has fluctuated over the past five years, ranging from 0.19 to 0.50. In 2021, the ratio was relatively high at 0.50, indicating that 50% of the company's assets were financed by debt. This suggests a higher level of financial risk compared to the subsequent years.
The downward trend observed in the debt-to-assets ratio from 2021 to 2023 may indicate a more conservative approach to financing operations, with a lower reliance on debt. A lower ratio generally implies that a higher proportion of the company's assets are funded by equity, which can be viewed positively by investors and creditors as it signifies a lower risk of financial distress.
However, it is important to note that a very low debt-to-assets ratio, such as 0.19 seen in 2023 and 2022, could also signify underutilization of debt financing opportunities that could potentially enhance returns on equity. Overall, the trend in Zurn Elkay Water Solutions Corporation's debt-to-assets ratio suggests a mix of prudence in managing financial risk and potentially missed opportunities for leveraging debt for growth and profitability.
Peer comparison
Dec 31, 2023