American Woodmark Corporation (AMWD)
Financial leverage ratio
| Apr 30, 2024 | Apr 30, 2023 | Apr 30, 2022 | Apr 30, 2021 | Apr 30, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 1,593,860 | 1,518,800 | 1,632,500 | 1,654,400 | 1,529,930 |
| Total stockholders’ equity | US$ in thousands | 910,376 | 873,788 | 772,883 | 756,238 | 632,473 |
| Financial leverage ratio | 1.75 | 1.74 | 2.11 | 2.19 | 2.42 |
April 30, 2024 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $1,593,860K ÷ $910,376K
= 1.75
The financial leverage ratio of American Woodmark Corporation has exhibited a declining trend over the past five years, decreasing from 2.42 in April 2019 to 1.75 in April 2024. This suggests that the company has been reducing its reliance on debt financing relative to equity over this period. A lower financial leverage ratio indicates a lower level of financial risk due to a lesser dependence on borrowed funds to finance its operations and investments. It can also imply a stronger financial position and greater stability for the company, as it is less vulnerable to fluctuations in interest rates or potential difficulties in servicing debt. However, it is important to note that the ideal level of financial leverage can vary depending on the industry and company-specific factors, and further analysis would be necessary to fully assess the implications of this trend for American Woodmark Corporation.