ArcBest Corp (ARCB)

Financial leverage ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Total assets	US$ in thousands	2,485,090	2,494,290	2,112,680	1,779,010	1,651,210
Total stockholders’ equity	US$ in thousands	1,242,360	1,151,400	929,067	828,593	763,043
Financial leverage ratio		2.00	2.17	2.27	2.15	2.16

December 31, 2023 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $2,485,090K ÷ $1,242,360K
= 2.00

The financial leverage ratio of ArcBest Corp has been fluctuating over the past five years, ranging from 2.00 to 2.27. This ratio indicates the extent to which the company is utilizing debt in its capital structure to finance its operations and growth.

A financial leverage ratio of 2.00 in 2023 suggests that for every $1 of equity, the company has $2 of debt. This indicates that ArcBest Corp relies moderately on debt financing, with a higher proportion of debt in its capital structure compared to equity.

The trend from 2020 to 2022 shows an increasing leverage ratio, peaking at 2.27 in 2022. This upward trend may indicate that the company has been increasing its debt levels relative to equity, which could be a strategic decision to fund investments or expansion projects.

However, the decrease in the financial leverage ratio in 2023 to 2.00 could signify a potential shift towards lowering the level of debt in the company's capital structure or increasing equity. This reduction in leverage could be a response to changing economic conditions, risk management considerations, or a strategy to improve financial stability.

Overall, analyzing the financial leverage ratio of ArcBest Corp provides insights into the company's capital structure and financing decisions over the years, highlighting its reliance on debt as a source of funding and the potential adjustments in its leverage strategy.