Arch Resources Inc (ARCH)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 2,484,170 | 2,433,110 | 2,117,160 | 1,722,470 | 1,867,760 |
| Total stockholders’ equity | US$ in thousands | 1,479,460 | 1,365,580 | 683,866 | 283,561 | 640,536 |
| Financial leverage ratio | 1.68 | 1.78 | 3.10 | 6.07 | 2.92 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $2,484,170K ÷ $1,479,460K
= 1.68
The financial leverage ratio of Arch Resources Inc has exhibited fluctuations over the last five years. The ratio was 1.68 at the end of 2023, indicating that the company had $1.68 in debt for every $1 of equity. Compared to the prior year, the financial leverage has decreased from 1.78 in 2022, signifying a reduction in the company's reliance on debt financing.
In 2021, the ratio significantly dropped to 3.10, signaling a notable increase in the company's debt relative to equity. The year 2020 witnessed a substantial spike in the financial leverage ratio to 6.07, indicating a significant rise in debt compared to equity, suggesting higher financial risk for the company. However, in 2019, the ratio was at 2.92, reflecting a lower level of debt relative to equity compared to 2020.
Overall, the trend indicates some volatility in the company's capital structure, with fluctuations in the level of debt used to finance its operations over the past five years. It is crucial for investors and stakeholders to closely monitor the financial leverage ratio to assess the company's solvency and financial risk.
Peer comparison
Dec 31, 2023