CH Robinson Worldwide Inc (CHRW)

Financial leverage ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Total assets	US$ in thousands	5,225,280	5,954,560	7,028,110	5,144,260	4,641,060
Total stockholders’ equity	US$ in thousands	1,418,700	1,353,420	2,021,930	1,879,930	1,670,730
Financial leverage ratio		3.68	4.40	3.48	2.74	2.78

December 31, 2023 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $5,225,280K ÷ $1,418,700K
= 3.68

The financial leverage ratio of C.H. Robinson Worldwide, Inc. has shown fluctuations over the past five years. The trend indicates an increase in leverage from 2.74 in 2020 to 4.40 in 2022 followed by a decrease to 3.68 in 2023. This suggests that the company has been increasingly relying on debt to finance its operations in 2022 before slightly reducing this dependence in 2023.

Comparing the financial leverage ratio of 3.68 in 2023 to the ratios in 2021 (3.48), 2020 (2.74), and 2019 (2.78), we observe that the current ratio is higher than the ratios in 2019 and 2020 but lower than the ratio in 2022. This indicates that while the company has increased its leverage compared to previous years, it has made efforts to reduce debt levels from the peak seen in 2022.

Overall, monitoring the financial leverage ratio is crucial for assessing the company's ability to meet its financial obligations. A higher ratio suggests higher financial risk due to increased reliance on debt, while a lower ratio indicates a lower level of financial risk but may also imply underutilization of debt financing benefits. The company should carefully manage its leverage to maintain a healthy financial structure and ensure sustainable growth.