Colgate-Palmolive Company (CL)
Financial leverage ratio
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 16,046,000 | 16,393,000 | 15,731,000 | 15,040,000 | 15,920,000 |
| Total stockholders’ equity | US$ in thousands | 212,000 | 609,000 | 401,000 | 609,000 | 743,000 |
| Financial leverage ratio | 75.69 | 26.92 | 39.23 | 24.70 | 21.43 |
December 31, 2024 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $16,046,000K ÷ $212,000K
= 75.69
The financial leverage ratio measures the extent to which a company relies on debt to finance its operations and growth. Looking at the data provided for Colgate-Palmolive Company from 2020 to 2024, we observe fluctuations in the financial leverage ratio. In 2020, the ratio stood at 21.43, indicating that the company had a moderate level of debt in its capital structure. Over the next few years, the ratio increased significantly to 39.23 in 2022, suggesting a higher reliance on debt financing.
However, in 2023, we see a slight decrease in the financial leverage ratio to 26.92, which could imply that the company may have taken steps to reduce its debt levels or improved its equity position. Notably, by the end of 2024, the financial leverage ratio spiked to 75.69, signifying a substantial increase in debt relative to equity in the capital structure. Such a high ratio may raise concerns about the company's financial risk and ability to meet its debt obligations.
Overall, the trend in Colgate-Palmolive's financial leverage ratio indicates fluctuations in the company's debt usage over the years, underlining the importance of closely monitoring leverage levels to assess the financial health and risk profile of the company.
Peer comparison
Dec 31, 2024