Air Products and Chemicals Inc (APD)

Financial leverage ratio

		Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019
Total assets	US$ in thousands	39,574,600	36,974,300	35,921,700	34,118,200	32,002,500	30,929,500	29,435,400	28,278,300	27,192,600	27,489,000	27,449,700	27,125,300	26,859,200	26,252,100	26,158,900	26,088,100	25,168,500	24,782,100	19,501,200	19,651,600
Total stockholders’ equity	US$ in thousands	17,036,500	15,101,300	14,913,400	14,873,000	14,312,900	14,138,000	14,058,300	13,935,700	13,144,000	13,643,900	13,955,100	13,825,100	13,539,700	13,082,900	12,726,200	12,683,600	12,079,800	11,659,300	11,371,900	11,556,000
Financial leverage ratio		2.32	2.45	2.41	2.29	2.24	2.19	2.09	2.03	2.07	2.01	1.97	1.96	1.98	2.01	2.06	2.06	2.08	2.13	1.71	1.70

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 a fluctuating trend over the past few years, ranging from 1.70 to 2.45. The ratio indicates that the company relies on debt to finance its operations and investments, with a ratio consistently above 2. This suggests that a significant portion of the company's assets is funded by debt rather than equity.

A ratio above 2 indicates relatively high financial leverage, which can magnify returns in favorable conditions but also increases financial risk, especially in times of economic downturns or rising interest rates. It is important for investors and stakeholders to monitor the company's ability to service its debt obligations as indicated by its cash flows and profitability.

The increasing trend in the financial leverage ratio from 1.70 in December 2019 to 2.45 in June 2024 indicates that the company has been taking on more debt relative to its equity over time. This could be a strategic decision to fund growth initiatives or acquisitions, but it also poses potential risks in terms of financial stability and flexibility. Investors should assess the company's overall financial health and management of debt levels to make informed decisions about their investment in Air Products and Chemicals Inc.