AAR Corp (AIR)
Financial leverage ratio
| May 31, 2025 | Feb 28, 2025 | Nov 30, 2024 | Aug 31, 2024 | May 31, 2024 | Feb 29, 2024 | Nov 30, 2023 | Aug 31, 2023 | May 31, 2023 | Feb 28, 2023 | Nov 30, 2022 | Aug 31, 2022 | May 31, 2022 | Feb 28, 2022 | Nov 30, 2021 | Aug 31, 2021 | May 31, 2021 | Feb 28, 2021 | Nov 30, 2020 | Aug 31, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 2,844,600 | 2,859,100 | 2,849,300 | 2,783,300 | 2,770,000 | 2,021,800 | 1,965,600 | 1,954,400 | 1,833,100 | 1,673,300 | 1,646,900 | 1,598,900 | 1,573,900 | 1,552,000 | 1,529,600 | 1,535,700 | 1,539,700 | 1,642,800 | 1,669,300 | 1,713,800 |
| Total stockholders’ equity | US$ in thousands | 1,211,600 | 1,182,600 | 1,181,600 | 1,210,200 | 1,189,800 | 1,168,000 | 1,155,500 | 1,121,900 | 1,099,100 | 1,067,700 | 1,035,300 | 1,036,500 | 1,034,500 | 1,017,700 | 1,007,000 | 988,200 | 974,400 | 932,400 | 900,700 | 890,600 |
| Financial leverage ratio | 2.35 | 2.42 | 2.41 | 2.30 | 2.33 | 1.73 | 1.70 | 1.74 | 1.67 | 1.57 | 1.59 | 1.54 | 1.52 | 1.53 | 1.52 | 1.55 | 1.58 | 1.76 | 1.85 | 1.92 |
May 31, 2025 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $2,844,600K ÷ $1,211,600K
= 2.35
The financial leverage ratio of AAR Corp exhibits a discernible upward trend over the analyzed period, reflecting changing leverage positions. Starting at 1.92 on August 31, 2020, the ratio declined steadily in subsequent periods, reaching a low of approximately 1.52 by November 30, 2021, indicating a reduction in the company's reliance on debt relative to equity during that timeframe.
However, from late 2021 onward, the leverage ratio demonstrates a gradual increase, signaling a trend toward higher financial leverage. Notably, the ratio marginally increased to around 1.67 by May 31, 2023, and continued to ascend, reaching approximately 2.33 by May 31, 2024. This surge indicates that the company has been employing more debt in its capital structure relative to equity, thus increasing its financial leverage.
Recent data further underscores this upward trend, with the ratio stabilizing around 2.30 to 2.41 through the latter part of 2024 and early 2025. The escalation in the financial leverage ratio suggests that AAR Corp has been gradually increasing its debt levels relative to equity, which could enhance potential returns to shareholders but also increases financial risk.
Overall, the pattern indicates a transition from reducing leverage in the early part of the period toward a more leveraged position in recent years, emphasizing a shift in the company's capital structure that warrants consideration of increased financial risk against potential benefits.
Peer comparison
May 31, 2025