Aecom Technology Corporation (ACM)
Financial leverage ratio
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 12,061,700 | 11,233,400 | 11,139,300 | 11,734,000 | 12,999,000 |
| Total stockholders’ equity | US$ in thousands | 2,184,200 | 2,212,330 | 2,476,650 | 2,712,470 | 3,292,560 |
| Financial leverage ratio | 5.52 | 5.08 | 4.50 | 4.33 | 3.95 |
September 30, 2024 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $12,061,700K ÷ $2,184,200K
= 5.52
The financial leverage ratio of Aecom Technology Corporation has shown a consistent upward trend over the past five years, increasing from 3.95 in 2020 to 5.52 in 2024. This indicates a progressive rise in the company's reliance on debt financing to fund its operations and investments compared to its equity.
A higher financial leverage ratio suggests that the company has a higher proportion of debt in its capital structure, which can potentially lead to higher financial risk due to the obligations associated with servicing debt. It is important to note that while higher leverage can magnify returns in favorable market conditions, it also increases the vulnerability of the company to financial distress in times of economic downturns or interest rate hikes.
Overall, the increasing trend in Aecom Technology Corporation's financial leverage ratio over the years highlights the importance of monitoring the company's debt levels and its ability to manage and repay its debt obligations effectively in order to sustain its long-term financial health and stability.
Peer comparison
Sep 30, 2024