Central Garden & Pet Company (CENT)
Financial leverage ratio
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 3,378,650 | 3,282,000 | 3,116,680 | 2,339,360 | 2,025,020 |
| Total stockholders’ equity | US$ in thousands | 1,451,350 | 1,333,710 | 1,222,250 | 1,076,800 | 996,007 |
| Financial leverage ratio | 2.33 | 2.46 | 2.55 | 2.17 | 2.03 |
September 30, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $3,378,650K ÷ $1,451,350K
= 2.33
The financial leverage ratio of Central Garden & Pet Co. represents a measure of the company's use of debt to finance its operations in comparison to its equity. The trend in the financial leverage ratio over the past five years indicates the company's ability to manage its debt and equity structure.
In 2023, the financial leverage ratio decreased to 2.33 from 2.46 in 2022. This suggests that the company relied less on debt financing relative to equity compared to the previous year. The decrease in the ratio could indicate a more conservative approach to leveraging, potentially resulting from either a reduction in debt levels or an increase in equity.
In 2022, the financial leverage ratio decreased to 2.46 from 2.55 in 2021, indicating a slight reduction in the company's reliance on debt financing. This shift may suggest a conscious effort to manage debt levels and maintain a healthy balance between debt and equity.
The ratio was 2.55 in 2021, an increase from 2.17 in 2020. This indicates that the company had increased its reliance on debt relative to equity. The considerable rise in the financial leverage ratio could suggest that the company took on additional debt during that period, potentially for investment or expansion purposes.
In 2020, the financial leverage ratio increased to 2.17 from 2.03 in 2019, demonstrating a slightly higher reliance on debt financing. The increase may indicate a strategic decision to utilize debt to fund activities such as acquisitions or capital expenditures.
In 2019, the ratio was 2.03, showing a moderate increase from previous years. This rise suggests the company may have taken on additional debt compared to the previous year, potentially for growth initiatives.
Overall, the trend in Central Garden & Pet Co.'s financial leverage ratio reflects fluctuations in its capital structure and financing decisions. The company's ability to effectively manage its debt and equity mix has evolved over the years, impacting its financial leverage ratio. These shifts in leverage indicate the company's responsiveness to market conditions and strategic objectives in balancing its capital structure. Understanding these changes in leverage ratios can provide insight into the company's risk profile and financial stability.
Peer comparison
Sep 30, 2023