Armstrong World Industries Inc (AWI)
Financial leverage ratio
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 1,672,400 | 1,713,800 | 1,712,300 | 1,687,900 | 1,687,200 | 1,739,400 | 1,734,000 | 1,708,100 | 1,710,000 | 1,704,900 | 1,716,700 | 1,715,300 | 1,718,500 | 1,633,700 | 1,544,300 | 1,590,300 | 1,493,300 | 1,509,700 | 1,890,000 | 1,942,600 |
| Total stockholders’ equity | US$ in thousands | 591,800 | 585,500 | 566,700 | 544,800 | 535,000 | 521,200 | 527,800 | 537,600 | 519,700 | 522,200 | 498,300 | 473,600 | 450,900 | 442,600 | 402,900 | 370,400 | 364,900 | 367,300 | 243,100 | 245,100 |
| Financial leverage ratio | 2.83 | 2.93 | 3.02 | 3.10 | 3.15 | 3.34 | 3.29 | 3.18 | 3.29 | 3.26 | 3.45 | 3.62 | 3.81 | 3.69 | 3.83 | 4.29 | 4.09 | 4.11 | 7.77 | 7.93 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $1,672,400K ÷ $591,800K
= 2.83
Armstrong World Industries Inc.'s financial leverage ratio has exhibited a declining trend from Q4 2022 to Q1 2023, indicating an improvement in the company's leverage position. The ratio decreased from 3.15 in Q4 2022 to 3.10 in Q1 2023. However, it is important to note that the financial leverage ratio has been fluctuating within a narrow range between 2.83 and 3.34 over the past eight quarters.
A financial leverage ratio of 3.10 in Q1 2023 suggests that the company finances its assets with approximately 3.10 units of debt for every unit of equity. This indicates a moderate level of leverage, which may pose some risk but also offers the potential for higher returns to equity investors. The decreasing trend in the financial leverage ratio indicates that Armstrong World Industries Inc. has been reducing its reliance on debt to fund its operations, which could lead to a more stable financial position in the long term.
Overall, the evolving financial leverage ratio of Armstrong World Industries Inc. reflects a strategic approach towards managing its debt levels and optimizing its capital structure to support sustainable growth and profitability. However, it is essential for the company to continue monitoring and adjusting its leverage position to strike a balance between risk and return in the constantly changing business environment.
Peer comparison
Dec 31, 2023