Balchem Corporation (BCPC)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 1,597,210 | 1,624,510 | 1,199,320 | 1,165,840 | 1,155,680 |
| Total stockholders’ equity | US$ in thousands | 1,053,980 | 938,284 | 877,015 | 828,233 | 743,667 |
| Financial leverage ratio | 1.52 | 1.73 | 1.37 | 1.41 | 1.55 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $1,597,210K ÷ $1,053,980K
= 1.52
The financial leverage ratio of Balchem Corp. has shown fluctuations over the past five years. The ratio has ranged from 1.37 to 1.73 during this period. A higher financial leverage ratio indicates that a company has higher levels of debt relative to equity, suggesting increased financial risk. Conversely, a lower ratio implies lower financial risk as the company relies more on equity financing.
In 2023, the financial leverage ratio decreased to 1.52 from 1.73 in 2022, indicating a potential reduction in the company's reliance on debt financing. This could be viewed positively by investors and creditors as it signifies a decrease in financial risk.
In 2021, the ratio was at its lowest point of 1.37, signaling a conservative approach to capital structure with lower debt levels relative to equity. However, in 2022 and 2019, the ratio was higher at 1.73 and 1.55 respectively, suggesting a higher proportion of debt in the capital structure during those years.
Overall, a fluctuating financial leverage ratio for Balchem Corp. indicates varying levels of debt usage over the years, which may have different implications for the company's financial risk and performance. Further analysis of the company's debt management strategies and financial health is recommended to better understand the impact of the changes in the financial leverage ratio.
Peer comparison
Dec 31, 2023