The Clorox Company (CLX)
Financial leverage ratio
| Jun 30, 2025 | Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 5,561,000 | 5,751,000 | 5,945,000 | 6,158,000 | 6,334,000 |
| Total stockholders’ equity | US$ in thousands | 321,000 | 328,000 | 220,000 | 556,000 | 411,000 |
| Financial leverage ratio | 17.32 | 17.53 | 27.02 | 11.08 | 15.41 |
June 30, 2025 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $5,561,000K ÷ $321,000K
= 17.32
The financial leverage ratio of The Clorox Company has exhibited notable fluctuations over the period from June 30, 2021, to June 30, 2025. As of June 30, 2021, the ratio stood at 15.41, indicating a moderate level of leverage, with the company employing a balanced mix of debt and equity to finance its assets. By June 30, 2022, the ratio decreased significantly to 11.08, suggesting that the company reduced its financial leverage, potentially through debt repayment or increased equity issuance, thereby decreasing its reliance on debt financing.
However, a substantial increase occurred by June 30, 2023, with the ratio rising sharply to 27.02. This escalation indicates a considerable use of debt relative to equity, resulting in heightened financial leverage and potentially increased financial risk. Such a surge could be attributable to strategic debt financing for acquisitions, capital investments, or refinancing activities that amplified leverage beyond previous levels.
Following this peak, the financial leverage ratio decreased to 17.53 by June 30, 2024, reflecting a partial deleveraging or reduction in debt levels relative to equity, which may imply efforts to mitigate financial risk or adjust capital structure. The ratio remained relatively stable with a marginal decline to 17.32 by June 30, 2025, indicating a stabilization of leverage levels after the previous adjustments.
Overall, the trend indicates periods of both deleveraging and increased leverage, with the most significant fluctuation occurring in 2023. The variations suggest that the company's capital structure management strategies have involved balancing debt and equity, with potentially substantial implications for financial risk, cost of capital, and operational flexibility during this period.