Amphenol Corporation (APH)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 16,526,400 | 15,326,200 | 14,678,400 | 12,327,300 | 10,815,500 |
| Total stockholders’ equity | US$ in thousands | 8,346,500 | 7,015,600 | 6,302,000 | 5,384,900 | 4,530,300 |
| Financial leverage ratio | 1.98 | 2.18 | 2.33 | 2.29 | 2.39 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $16,526,400K ÷ $8,346,500K
= 1.98
The financial leverage ratio of Amphenol Corp. has shown a declining trend over the past five years, decreasing from 2.39 in 2019 to 1.98 in 2023. This indicates that the company's reliance on debt to finance its operations has reduced over time. A lower financial leverage ratio generally signifies a lower level of financial risk as it suggests a smaller proportion of debt in relation to equity in the company's capital structure.
The decreasing trend in the financial leverage ratio may be a result of Amphenol Corp. reducing its debt levels or increasing its equity base through retained earnings or equity issuances. This may have been a strategic decision by the company to strengthen its financial position, enhance its creditworthiness, and reduce interest expenses.
Overall, the declining financial leverage ratio suggests that Amphenol Corp. has been managing its debt levels prudently and focusing on maintaining a balanced capital structure to support its ongoing operations and growth initiatives.