Archer-Daniels-Midland Company (ADM)
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 | 54,631,000 | 55,093,000 | 55,499,000 | 58,802,000 | 59,774,000 | 58,304,000 | 61,828,000 | 64,866,000 | 56,136,000 | 52,298,000 | 50,958,000 | 51,478,000 | 49,719,000 | 44,795,000 | 44,341,000 | 48,395,000 | 43,997,000 | 41,804,000 | 42,616,000 | 43,151,000 |
| Total stockholders’ equity | US$ in thousands | 21,432,000 | 25,228,000 | 24,939,000 | 24,860,000 | 22,584,000 | 23,997,000 | 24,393,000 | 23,722,000 | 22,177,000 | 21,969,000 | 21,582,000 | 20,841,000 | 20,000,000 | 19,322,000 | 19,293,000 | 18,952,000 | 13,808,000 | 18,873,000 | 18,955,000 | 18,895,000 |
| Financial leverage ratio | 2.55 | 2.18 | 2.23 | 2.37 | 2.65 | 2.43 | 2.53 | 2.73 | 2.53 | 2.38 | 2.36 | 2.47 | 2.49 | 2.32 | 2.30 | 2.55 | 3.19 | 2.22 | 2.25 | 2.28 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $54,631,000K ÷ $21,432,000K
= 2.55
The financial leverage ratio of Archer-Daniels-Midland Company has varied over the past few quarters, ranging from a low of 2.18 to a high of 3.19. This ratio indicates the extent to which the company is utilizing debt to finance its operations and investments.
A high financial leverage ratio suggests that a significant portion of the company's assets are funded by debt, which can amplify returns but also increase financial risk. Conversely, a low ratio indicates a more conservative capital structure with a greater reliance on equity financing.
In the case of Archer-Daniels-Midland Company, the trend in the financial leverage ratio shows some fluctuations but generally maintained within a moderate range, with occasional spikes indicating potential changes in borrowing or investment activities. It is important for stakeholders to monitor this ratio over time to assess the company's overall financial risk and sustainability in relation to its debt levels.
Peer comparison
Dec 31, 2023