Alaska Air Group Inc (ALK)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 14,613,000 | 14,186,000 | 13,951,000 | 14,046,000 | 12,993,000 |
| Total stockholders’ equity | US$ in thousands | 4,113,000 | 3,816,000 | 3,801,000 | 2,988,000 | 4,331,000 |
| Financial leverage ratio | 3.55 | 3.72 | 3.67 | 4.70 | 3.00 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $14,613,000K ÷ $4,113,000K
= 3.55
Alaska Air Group Inc.'s financial leverage ratio has exhibited fluctuations over the past five years. The ratio decreased from 4.70 in 2020 to 3.00 in 2019, indicating a reduction in financial leverage during this period. However, in subsequent years, the ratio increased, reaching 3.72 in 2022 before slightly declining to 3.55 in 2023.
A financial leverage ratio of 3.55 in 2023 suggests that the company has $3.55 of debt for every $1 of equity. This level of leverage indicates that Alaska Air Group relies more on debt financing compared to equity to support its operations and growth.
While a decreasing financial leverage ratio can be viewed positively as it signifies a lower reliance on debt, it is essential to assess the company's overall financial health and ability to manage its debt obligations effectively. The fluctuations in the financial leverage ratio highlight the importance of monitoring the company's capital structure and debt management strategies.
Peer comparison
Dec 31, 2023