Avery Dennison Corp (AVY)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 8,209,800 | 7,950,500 | 7,971,600 | 6,083,900 | 5,488,800 |
| Total stockholders’ equity | US$ in thousands | 2,127,900 | 2,032,200 | 1,924,400 | 1,484,900 | 1,204,000 |
| Financial leverage ratio | 3.86 | 3.91 | 4.14 | 4.10 | 4.56 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $8,209,800K ÷ $2,127,900K
= 3.86
The financial leverage ratio of Avery Dennison Corp has shown a declining trend over the past five years, decreasing from 4.56 in 2019 to 3.86 in 2023. This indicates that the company has been relying less on debt to finance its operations and investments relative to its equity. A lower financial leverage ratio can be viewed positively as it signifies lower financial risk and a stronger equity position. However, it is important to note that a very low leverage ratio may also suggest underutilization of debt for potential growth opportunities. Overall, the decreasing trend in the financial leverage ratio of Avery Dennison Corp suggests a more conservative capital structure strategy in recent years.
Peer comparison
Dec 31, 2023