AAR Corp (AIR)
Financial leverage ratio
| May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | May 31, 2020 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 2,770,000 | 1,833,100 | 1,573,900 | 1,539,700 | 2,079,000 |
| Total stockholders’ equity | US$ in thousands | 1,189,800 | 1,099,100 | 1,034,500 | 974,400 | 902,600 |
| Financial leverage ratio | 2.33 | 1.67 | 1.52 | 1.58 | 2.30 |
May 31, 2024 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $2,770,000K ÷ $1,189,800K
= 2.33
The financial leverage ratio of AAR Corp has shown fluctuations over the past five years. In 2024, the financial leverage ratio increased to 2.33 from 1.67 in 2023, indicating an increase in the company's reliance on debt to finance its operations. This rise may suggest that AAR Corp has taken on additional debt to support its growth or operational needs.
Comparing the current ratio to the previous years, it is visibly higher than the ratios of 2022 and 2021. However, it remains below the ratio of 2020, indicating that the company's debt levels are still not as high as they were two years ago.
Overall, the upward trend in the financial leverage ratio signifies an increased level of debt utilization by AAR Corp in the most recent fiscal year, which may have implications for the company's financial risk profile and future financial performance. It is essential for stakeholders to closely monitor how AAR Corp manages its debt levels and repayment obligations going forward.
Peer comparison
May 31, 2024