Zurn Elkay Water Solutions Corporation (ZWS)
Debt-to-equity 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 stockholders’ equity | US$ in thousands | 1,602,800 | 1,615,000 | 126,400 | 1,311,000 | 1,228,600 |
| Debt-to-equity ratio | 0.31 | 0.33 | 4.22 | 1.07 | 1.01 |
December 31, 2023 calculation
Debt-to-equity ratio = Long-term debt ÷ Total stockholders’ equity
= $494,400K ÷ $1,602,800K
= 0.31
The debt-to-equity ratio of Zurn Elkay Water Solutions Corporation has fluctuated over the past five years. In 2023, the ratio stands at 0.31, indicating that the company relies less on debt financing and has a stronger equity base to support its operations. This suggests a relatively lower financial risk and a healthier balance sheet structure.
Compared to the previous year, where the ratio was 0.33, there has been a slight improvement in financial leverage, with the company reducing its debt relative to equity. This trend is positive as it shows a prudent approach towards managing debt levels.
However, the significant spike in the ratio to 4.22 in 2021 raises concerns about the company's high debt levels compared to equity. This could indicate potential financial distress or overleveraging, which might pose risks to the company's financial stability.
In the years 2020 and 2019, the debt-to-equity ratios were more moderate at 1.07 and 1.01, respectively. These levels suggest a balanced mix of debt and equity financing, indicating a more stable financial position during those periods.
Overall, the recent decline in the debt-to-equity ratio in 2023 reflects a positive trend towards a stronger financial structure and reduced reliance on debt. However, the company should continue to monitor and manage its debt levels to ensure adequate financial stability and long-term sustainability.
Peer comparison
Dec 31, 2023