Allegheny Technologies Incorporated (ATI)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 4,985,100 | 4,445,600 | 4,285,200 | 4,034,900 | 5,634,600 |
| Total stockholders’ equity | US$ in thousands | 1,373,000 | 1,045,900 | 685,600 | 521,100 | 2,090,100 |
| Financial leverage ratio | 3.63 | 4.25 | 6.25 | 7.74 | 2.70 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $4,985,100K ÷ $1,373,000K
= 3.63
The financial leverage ratio for ATI Inc has shown fluctuations over the past five years. The ratio stood at 3.63 in 2023, which represents a decrease from the previous year's figure of 4.25 in 2022. This reduction in the financial leverage ratio indicates that the company has decreased its dependency on debt to finance its operations compared to the prior year.
Further analyzing the trend, the financial leverage ratio was at 6.25 in 2021, significantly higher than in 2022. This suggests that the company had a higher level of leverage in 2021, which may have increased its financial risk. The ratio continued to decrease in 2020, where it stood at 7.74, indicating a reduction in leverage compared to the previous year.
In 2019, the financial leverage ratio was at 2.70, which was lower than in 2020. This might indicate that the company had lower reliance on debt in 2019 to fund its operations.
Overall, the fluctuations in ATI Inc's financial leverage ratio over the five-year period demonstrate varying levels of debt usage by the company to support its growth and operations. It is essential for stakeholders to closely monitor these changes to assess the company's financial risk and sustainability.