Chemed Corp (CHE)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 1,668,100 | 1,442,010 | 1,342,720 | 1,434,910 | 1,268,320 |
| Total stockholders’ equity | US$ in thousands | 1,107,880 | 798,715 | 623,273 | 901,200 | 726,608 |
| Financial leverage ratio | 1.51 | 1.81 | 2.15 | 1.59 | 1.75 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $1,668,100K ÷ $1,107,880K
= 1.51
The financial leverage ratio of Chemed Corp. has displayed fluctuations over the past five years. In 2023, the financial leverage ratio decreased to 1.51 from 1.81 in 2022, indicating a reduction in the company's reliance on debt to finance its operations. This could suggest improved financial stability and reduced risk associated with debt obligations.
Compared to 2021 when the financial leverage ratio stood at 2.15, the ratio has shown a significant decrease, indicating a lesser extent of debt usage in the firm's capital structure. However, it is worth noting that in 2023, the financial leverage ratio remains higher than the levels seen in 2020 and 2019, which were 1.59 and 1.75, respectively.
A decreasing trend in the financial leverage ratio over the past two years may signal a strategic shift towards a more conservative financial structure, possibly aiming to reduce interest expenses and enhance financial flexibility. Chemed Corp. appears to be managing its debt levels and capital structure prudently, as reflected in the evolving financial leverage ratio.
Peer comparison
Dec 31, 2023