Air Products and Chemicals Inc (APD)

Financial leverage ratio

		Sep 30, 2024	Sep 30, 2023	Sep 30, 2022	Sep 30, 2021	Sep 30, 2020
Total assets	US$ in thousands	39,574,600	32,002,500	27,192,600	26,859,200	25,168,500
Total stockholders’ equity	US$ in thousands	17,036,500	14,312,900	13,144,000	13,539,700	12,079,800
Financial leverage ratio		2.32	2.24	2.07	1.98	2.08

September 30, 2024 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $39,574,600K ÷ $17,036,500K
= 2.32

The financial leverage ratio of Air Products and Chemicals Inc has shown an increasing trend over the past five years. In Sep 2020, the ratio was 2.08, and it increased to 2.32 by Sep 2024. This indicates that the company's level of financial leverage has been gradually increasing, suggesting that a larger portion of its assets is financed through debt rather than equity.

A financial leverage ratio of 2.32 in 2024 means that the company's total assets are 2.32 times greater than its equity. This level of leverage indicates that Air Products and Chemicals Inc is relying more heavily on debt financing to support its operations and investments. While this can amplify returns during good economic conditions, it also increases the company's financial risk, as higher levels of debt can result in higher interest payments and potential financial distress in times of economic downturn.

Overall, the increasing trend in the financial leverage ratio for Air Products and Chemicals Inc suggests a strategic shift towards utilizing more debt in its capital structure, which may have implications for the company's financial stability and risk profile in the future.