Avanos Medical Inc (AVNS)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 1,692,400 | 1,786,900 | 1,603,600 | 1,672,800 | 1,799,600 |
| Total stockholders’ equity | US$ in thousands | 1,236,300 | 1,291,200 | 1,270,600 | 1,262,100 | 1,272,600 |
| Financial leverage ratio | 1.37 | 1.38 | 1.26 | 1.33 | 1.41 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $1,692,400K ÷ $1,236,300K
= 1.37
The financial leverage ratio of Avanos Medical Inc has shown some fluctuations over the past five years, ranging from 1.26 in 2021 to 1.42 in 2019. The ratio indicates that for every dollar of equity capital Avanos Medical Inc uses to finance its operations, it also has debt obligations ranging from $1.26 to $1.42.
The slight decreases in the ratio in 2021 and 2023 suggest a lower reliance on debt financing compared to previous years, which may indicate a more conservative approach to capital structure. On the other hand, the higher ratios in 2019 and 2022 indicate a relatively higher level of debt in the capital structure, which could potentially increase the company's financial risk.
Overall, analyzing the financial leverage ratio highlights Avanos Medical Inc's use of debt to support its operations and investment activities over the years, offering insights into the company's capital structure management and risk profile.
Peer comparison
Dec 31, 2023