Bristol-Myers Squibb Company (BMY)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 95,159,000 | 96,820,000 | 109,314,000 | 118,481,000 | 129,944,000 |
| Total stockholders’ equity | US$ in thousands | 29,430,000 | 31,061,000 | 35,946,000 | 37,822,000 | 51,598,000 |
| Financial leverage ratio | 3.23 | 3.12 | 3.04 | 3.13 | 2.52 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $95,159,000K ÷ $29,430,000K
= 3.23
The financial leverage ratio of Bristol-Myers Squibb Co. has shown an increasing trend over the past five years, indicating a rising level of financial leverage. The ratio increased from 2.52 in 2019 to 3.23 in 2023.
A financial leverage ratio above 1 suggests that the company relies more on debt financing than equity financing. In this case, Bristol-Myers Squibb Co. has maintained a ratio consistently above 1, signifying a relatively high dependency on debt to fund its operations and growth.
The increase in the financial leverage ratio from 2022 to 2023 suggests that the company has been taking on more debt relative to equity, which can magnify returns but also increases the financial risk. It is essential for stakeholders to monitor this trend closely to assess the company's ability to meet its debt obligations and manage financial risks effectively in the long run.
Peer comparison
Dec 31, 2023