Advance Auto Parts Inc (AAP)
Financial leverage ratio
| Dec 31, 2023 | Oct 7, 2023 | Jul 15, 2023 | Apr 22, 2023 | Dec 31, 2022 | Oct 8, 2022 | Apr 23, 2022 | Dec 31, 2021 | Oct 9, 2021 | Jul 17, 2021 | Apr 24, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jul 11, 2020 | Apr 18, 2020 | Dec 31, 2019 | Oct 5, 2019 | Jul 13, 2019 | Apr 20, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 12,276,300 | 12,249,200 | 12,299,200 | 12,177,300 | 11,986,400 | 12,129,300 | 12,002,500 | 12,194,200 | 11,864,200 | 11,838,700 | 11,868,500 | 11,839,600 | 11,972,800 | 11,930,700 | 12,072,600 | 11,248,500 | 11,106,800 | 11,267,900 | 11,081,500 | 9,040,650 |
| Total stockholders’ equity | US$ in thousands | 2,519,730 | 2,566,340 | 2,642,650 | 2,562,720 | 2,599,190 | 2,719,550 | 2,909,680 | 3,129,450 | 3,196,540 | 3,301,560 | 3,501,570 | 3,559,510 | 3,762,660 | 3,726,520 | 3,537,030 | 3,549,080 | 3,454,940 | 3,671,300 | 3,547,220 | 3,550,810 |
| Financial leverage ratio | 4.87 | 4.77 | 4.65 | 4.75 | 4.61 | 4.46 | 4.13 | 3.90 | 3.71 | 3.59 | 3.39 | 3.33 | 3.18 | 3.20 | 3.41 | 3.17 | 3.21 | 3.07 | 3.12 | 2.55 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $12,276,300K ÷ $2,519,730K
= 4.87
The financial leverage ratio of Advance Auto Parts Inc has shown a consistent increasing trend over the years, indicating a higher level of leverage being employed by the company. The ratio has steadily risen from 2.55 at the end of 2018 to 4.87 at the end of 2023. This suggests that the company has been relying more on debt to finance its operations and growth.
The company's increasing financial leverage ratio may indicate a higher level of risk due to the potential for increased interest payments and debt servicing obligations. It also implies that the company may have less financial flexibility and margin of safety in times of economic downturns or adverse business conditions.
It is important for stakeholders to monitor Advance Auto Parts Inc's financial leverage ratio closely to assess the company's ability to manage its debt levels effectively and sustain its financial health over the long term.
Peer comparison
Dec 31, 2023