Advance Auto Parts Inc (AAP)
Financial leverage ratio
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 10,798,100 | 12,276,300 | 11,986,400 | 12,194,200 | 11,839,600 |
| Total stockholders’ equity | US$ in thousands | 2,169,940 | 2,519,730 | 2,599,190 | 3,128,290 | 3,559,510 |
| Financial leverage ratio | 4.98 | 4.87 | 4.61 | 3.90 | 3.33 |
December 31, 2024 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $10,798,100K ÷ $2,169,940K
= 4.98
The financial leverage ratio of Advance Auto Parts Inc has been on an increasing trend over the years, reflecting a rise in the company's reliance on debt financing. The ratio stood at 3.33 as of December 31, 2020, and has steadily climbed to 4.98 by December 31, 2024. This indicates that for every dollar of equity, the company has $4.98 of debt by the end of 2024. The escalating trend in the financial leverage ratio suggests that Advance Auto Parts Inc has been taking on more debt relative to its equity, potentially increasing the financial risk for the company. It is crucial for stakeholders to closely monitor this ratio as it may impact the company's ability to meet its financial obligations and withstand economic uncertainties.
Peer comparison
Dec 31, 2024