Applied Industrial Technologies (AIT)
Financial leverage ratio
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 2,951,910 | 2,743,330 | 2,452,590 | 2,271,810 | 2,283,550 |
| Total stockholders’ equity | US$ in thousands | 1,688,780 | 1,458,440 | 1,149,360 | 932,546 | 843,542 |
| Financial leverage ratio | 1.75 | 1.88 | 2.13 | 2.44 | 2.71 |
June 30, 2024 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $2,951,910K ÷ $1,688,780K
= 1.75
The financial leverage ratio of Applied Industrial Technologies has shown a declining trend over the past five years, decreasing from 2.71 in 2020 to 1.75 in 2024. This indicates that the company has been relying less on debt compared to its equity to finance its operations and investments. A lower financial leverage ratio suggests a lower level of financial risk and may indicate a more conservative financial structure. Applied Industrial Technologies has been effectively managing its debt levels and maintaining a healthy balance between debt and equity in its capital structure. Overall, the decreasing trend in the financial leverage ratio reflects a prudent financial strategy adopted by the company.