Clearwater Paper Corporation (CLW)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 1,671,800 | 1,703,500 | 1,690,100 | 1,800,400 | 1,877,700 |
| Total stockholders’ equity | US$ in thousands | 668,800 | 572,100 | 511,700 | 521,100 | 432,000 |
| Financial leverage ratio | 2.50 | 2.98 | 3.30 | 3.45 | 4.35 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $1,671,800K ÷ $668,800K
= 2.50
Clearwater Paper Corp's financial leverage ratio has exhibited a declining trend over the past five years, decreasing from 4.35 in 2019 to 2.50 in 2023. This indicates a reduction in the company's reliance on debt to finance its operations and assets. A lower financial leverage ratio suggests that the company is relying less on borrowed funds and has a stronger equity position.
The decreasing trend in the financial leverage ratio could be a positive signal for investors and creditors as it indicates an improvement in Clearwater Paper Corp's financial stability and risk management. A lower financial leverage ratio typically implies lower financial risk and a reduced likelihood of financial distress in case of economic downturns or adverse business conditions.
Overall, the decreasing financial leverage ratio for Clearwater Paper Corp suggests a more conservative approach to capital structure management and a stronger financial position compared to previous years. It indicates the company's efforts to maintain a balanced mix of debt and equity financing, which can contribute to long-term sustainability and growth.