Builders FirstSource Inc (BLDR)

Financial leverage ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Total assets	US$ in thousands	10,499,500	10,595,200	10,714,300	4,173,670	3,249,490
Total stockholders’ equity	US$ in thousands	4,732,350	4,962,570	4,802,480	1,152,780	824,953
Financial leverage ratio		2.22	2.14	2.23	3.62	3.94

December 31, 2023 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $10,499,500K ÷ $4,732,350K
= 2.22

The financial leverage ratio of Builders Firstsource Inc has shown some fluctuations over the past five years. The ratio was 3.94 in 2019, indicating high financial leverage at that time. However, there has been a downward trend in the ratio in the subsequent years, with values of 3.62 in 2020, 2.23 in 2021, 2.14 in 2022, and 2.22 in 2023.

A financial leverage ratio above 1 indicates that the company has more debt than equity in its capital structure. The downward trend in the ratio signifies a decreasing reliance on debt financing relative to equity financing over the years, which may indicate a more conservative approach to capital structure management.

Overall, while the financial leverage ratio of Builders Firstsource Inc has shown some fluctuations, the recent trend suggests a movement towards a more balanced capital structure with decreasing dependency on debt financing.