Clean Harbors Inc (CLH)
Financial leverage ratio
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 6,382,870 | 6,248,180 | 6,101,340 | 6,084,010 | 6,129,710 | 6,072,630 | 5,924,660 | 5,726,260 | 5,653,700 | 4,354,300 | 4,275,880 | 4,152,540 | 4,131,520 | 4,106,190 | 4,077,630 | 4,132,020 | 4,108,900 | 4,021,860 | 3,955,320 | 3,882,050 |
| Total stockholders’ equity | US$ in thousands | 2,247,510 | 2,185,790 | 2,109,890 | 1,980,040 | 1,922,320 | 1,837,580 | 1,716,950 | 1,593,240 | 1,513,890 | 1,463,560 | 1,409,590 | 1,348,450 | 1,341,550 | 1,304,720 | 1,253,970 | 1,205,800 | 1,269,810 | 1,235,800 | 1,209,470 | 1,171,960 |
| Financial leverage ratio | 2.84 | 2.86 | 2.89 | 3.07 | 3.19 | 3.30 | 3.45 | 3.59 | 3.73 | 2.98 | 3.03 | 3.08 | 3.08 | 3.15 | 3.25 | 3.43 | 3.24 | 3.25 | 3.27 | 3.31 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $6,382,870K ÷ $2,247,510K
= 2.84
Clean Harbors, Inc.'s financial leverage ratio has shown a consistent upward trend over the past eight quarters, indicating an increasing level of leverage in the company's capital structure. The ratio has moved from 3.19 in Q4 2022 to 2.84 in Q4 2023, suggesting a decrease in financial leverage over the last year. However, it is worth noting that the ratio has fluctuated within a relatively narrow range, with the highest value of 3.59 recorded in Q1 2022.
A financial leverage ratio above 1 implies that the company relies more on debt financing than equity financing to support its operations and growth. In Clean Harbors' case, the ratio consistently above 2 indicates a significant reliance on debt. This may pose risks and challenges in terms of meeting debt obligations, especially in periods of economic downturn or rising interest rates.
Investors and creditors typically monitor changes in the financial leverage ratio to assess the company's ability to manage its debt levels effectively. A decreasing trend in the ratio, as observed from Q4 2022 to Q4 2023, may indicate efforts to deleverage or optimize the capital structure to reduce financial risk. However, a high financial leverage ratio remains a concern and requires close monitoring to ensure sustainability and financial stability in the long term.
Peer comparison
Dec 31, 2023