Caleres Inc (CAL)
Financial leverage ratio
| Feb 3, 2024 | Jan 28, 2023 | Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 1,804,750 | 1,836,470 | 1,843,930 | 1,867,050 | 2,431,710 |
| Total stockholders’ equity | US$ in thousands | 560,631 | 420,683 | 318,570 | 200,247 | 645,950 |
| Financial leverage ratio | 3.22 | 4.37 | 5.79 | 9.32 | 3.76 |
February 3, 2024 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $1,804,750K ÷ $560,631K
= 3.22
The financial leverage ratio of Caleres Inc has fluctuated over the past five years, ranging from 3.22 in February 2024 to 9.32 in January 2021. This ratio measures the company's level of debt relative to its equity. A higher financial leverage ratio indicates that a company is using more debt to finance its operations, which can potentially magnify returns but also increases financial risk.
The significant increase in the financial leverage ratio from 2020 to 2021, reaching 9.32, suggests that Caleres Inc substantially increased its debt relative to equity during that period. This may have been a strategic decision to leverage debt for growth or investment opportunities. However, a high financial leverage ratio also implies higher interest payments and potential financial vulnerability in times of economic downturns.
In contrast, the decreasing trend in the financial leverage ratio from 2021 to 2024 indicates a reversal in the company's debt-to-equity structure, moving towards a lower level of debt relative to equity. This could be a deliberate effort by Caleres Inc to reduce financial risk and strengthen its balance sheet.
Overall, fluctuations in the financial leverage ratio of Caleres Inc reflect varying strategies and financial decisions made by the company over the years in managing its capital structure and optimizing its financial position. Investors and analysts should closely monitor these trends to assess the company's risk profile and financial health.
Peer comparison
Feb 3, 2024