Alcoa Corp (AA)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 14,155,000 | 14,756,000 | 15,025,000 | 14,860,000 | 14,631,000 |
| Total stockholders’ equity | US$ in thousands | 4,251,000 | 5,076,000 | 4,672,000 | 3,311,000 | 4,112,000 |
| Financial leverage ratio | 3.33 | 2.91 | 3.22 | 4.49 | 3.56 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $14,155,000K ÷ $4,251,000K
= 3.33
The financial leverage ratio of Alcoa Corp has shown fluctuation over the past five years. The ratio was highest in 2020 at 4.49, indicating that the company relied more on debt to finance its operations and investments relative to its equity. This high ratio may suggest higher financial risk and potential volatility in earnings due to the increased interest expenses associated with higher debt levels.
In contrast, the lowest financial leverage ratio of 2.91 in 2022 indicates a lower reliance on debt financing compared to equity. A lower ratio generally signifies a stronger financial position and lower risk, as the company has less debt to service.
Overall, the financial leverage ratio for Alcoa Corp has varied, reflecting changing capital structures and financial strategies over the years. It is important for investors and stakeholders to monitor these fluctuations to assess the company's risk profile and financial health.
Peer comparison
Dec 31, 2023