Baxter International Inc (BAX)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 28,276,000 | 28,287,000 | 33,521,000 | 20,019,000 | 18,193,000 |
| Total stockholders’ equity | US$ in thousands | 8,402,000 | 5,833,000 | 9,077,000 | 8,689,000 | 7,882,000 |
| Financial leverage ratio | 3.37 | 4.85 | 3.69 | 2.30 | 2.31 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $28,276,000K ÷ $8,402,000K
= 3.37
The financial leverage ratio of Baxter International Inc. has displayed fluctuations over the past five years, ranging from a low of 2.30 in 2020 to a high of 4.85 in 2022. The ratio indicates the proportion of the company's debt to its equity. A higher financial leverage ratio suggests that a greater portion of the company's assets are financed through debt, which may magnify the risk and potential returns for shareholders. In contrast, a lower ratio signifies a more conservative capital structure.
In 2023, the financial leverage ratio decreased to 3.37 from the previous year, showcasing a reduction in the proportion of debt relative to equity. This decline could indicate a strategic shift towards a more balanced capital structure or successful debt repayment. However, the ratio remains significantly higher than the levels observed in 2020 and 2019.
The trend in Baxter International Inc.'s financial leverage ratio suggests fluctuating levels of leverage and potential changes in the risk profile of the company over the years. Further analysis and comparison with industry benchmarks could provide insights into the company's capital structure decisions and overall financial health.
Peer comparison
Dec 31, 2023