AAON Inc (AAON)
Financial leverage ratio
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 941,436 | 944,543 | 930,051 | 867,914 | 813,903 | 785,843 | 776,712 | 717,458 | 650,180 | 516,403 | 504,184 | 483,384 | 449,008 | 439,913 | 429,807 | 395,620 | 371,424 | 351,900 | 341,981 | 319,238 |
| Total stockholders’ equity | US$ in thousands | 735,224 | 682,484 | 660,111 | 609,414 | 560,714 | 523,858 | 490,506 | 480,156 | 466,170 | 400,279 | 383,726 | 373,038 | 350,865 | 344,892 | 322,695 | 306,323 | 290,140 | 279,567 | 264,569 | 259,370 |
| Financial leverage ratio | 1.28 | 1.38 | 1.41 | 1.42 | 1.45 | 1.50 | 1.58 | 1.49 | 1.39 | 1.29 | 1.31 | 1.30 | 1.28 | 1.28 | 1.33 | 1.29 | 1.28 | 1.26 | 1.29 | 1.23 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $941,436K ÷ $735,224K
= 1.28
The financial leverage ratio of AAON Inc. has been fluctuating over the past eight quarters, ranging from a low of 1.28 in Q4 2023 to a high of 1.58 in Q2 2022. The financial leverage ratio measures the degree to which a company relies on debt to finance its assets. A ratio above 1 indicates that the company has more debt than equity in its capital structure.
The decreasing trend in the financial leverage ratio from Q2 2022 to Q4 2023 suggests that AAON Inc. has been reducing its reliance on debt to fund its operations and investments. This may indicate a stronger financial position and lower financial risk for the company.
However, it is important to note that a too low financial leverage ratio may also imply underutilization of debt financing, which could potentially limit the company's growth opportunities. Therefore, it is crucial for AAON Inc. to strike a balance between debt and equity in its capital structure to optimize its cost of capital and support its growth plans effectively.
Peer comparison
Dec 31, 2023