Central Garden & Pet Company (CENT)
Financial leverage ratio
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 3,553,440 | 3,378,650 | 3,282,000 | 3,116,680 | 2,339,360 |
| Total stockholders’ equity | US$ in thousands | 1,555,650 | 1,451,350 | 1,333,710 | 1,222,250 | 1,076,800 |
| Financial leverage ratio | 2.28 | 2.33 | 2.46 | 2.55 | 2.17 |
September 30, 2024 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $3,553,440K ÷ $1,555,650K
= 2.28
Central Garden & Pet Company's financial leverage ratio has exhibited fluctuations over the past five years. The ratio has decreased from 2.55 in 2021 to 2.28 in 2024, indicating a reduction in the company's reliance on debt to finance its operations and investments. However, it is important to note that the ratio increased from 2.17 in 2020 to 2.46 in 2022 before declining again.
A financial leverage ratio above 1 suggests that the company has more debt than equity in its capital structure. Central Garden & Pet Company's ratios over the period have consistently been above 1, indicating a higher proportion of debt relative to equity.
While a high financial leverage ratio can amplify returns on equity when profitability is high, it also increases the company's financial risk, especially in times of economic uncertainty or downturns. Therefore, it is crucial for investors and stakeholders to monitor Central Garden & Pet Company's financial leverage ratio trends to assess its debt management and overall financial health.
Peer comparison
Sep 30, 2024