American Axle & Manufacturing (AXL)
Financial leverage ratio
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 5,059,900 | 5,356,300 | 5,469,400 | 5,635,700 | 5,916,300 |
| Total stockholders’ equity | US$ in thousands | 562,800 | 604,900 | 627,300 | 457,800 | 370,500 |
| Financial leverage ratio | 8.99 | 8.85 | 8.72 | 12.31 | 15.97 |
December 31, 2024 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $5,059,900K ÷ $562,800K
= 8.99
The financial leverage ratio of American Axle & Manufacturing has shown a decreasing trend over the past few years. In 2020, the ratio was 15.97, indicating a relatively high level of financial leverage. However, by the end of 2024, the ratio had decreased to 8.99, reflecting a reduction in the company's reliance on debt to finance its operations.
This declining trend in the financial leverage ratio suggests that American Axle & Manufacturing has been effectively managing its debt levels and improving its overall financial stability. A lower ratio generally indicates a lower risk of financial distress and may be viewed positively by investors and creditors.
It is important to note that while a decreasing financial leverage ratio can be favorable, it is also essential for the company to strike a balance between debt and equity to ensure sustainable growth and optimal capital structure. Monitoring this ratio along with other financial metrics can provide valuable insights into the company's financial health and performance over time.
Peer comparison
Dec 31, 2024