Allegion PLC (ALLE)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 4,311,500 | 3,991,200 | 3,051,000 | 3,069,400 | 2,967,200 |
| Total stockholders’ equity | US$ in thousands | 1,318,300 | 941,800 | 759,100 | 829,400 | 757,400 |
| Financial leverage ratio | 3.27 | 4.24 | 4.02 | 3.70 | 3.92 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $4,311,500K ÷ $1,318,300K
= 3.27
The financial leverage ratio of Allegion plc has exhibited fluctuations over the past five years. The ratio decreased from 3.92 in 2019 to 3.70 in 2020, indicating a lower dependence on debt to finance its operations during that period. However, in 2021, the ratio increased to 4.02, suggesting a higher level of financial leverage. This trend continued in 2022, with the ratio further rising to 4.24, reflecting an increased reliance on debt financing.
In the most recent year, 2023, the financial leverage ratio decreased to 3.27, significantly lower compared to the previous years. This decrease could potentially signal a strategy of reducing debt levels or improving equity financing, leading to a lower financial risk. It is essential for stakeholders to monitor Allegion's financial leverage ratio closely to assess the company's risk profile and financial stability, as changes in leverage can impact profitability and the ability to meet financial obligations.