Commercial Metals Company (CMC)

Financial leverage ratio

		Aug 31, 2023	Aug 31, 2022	Aug 31, 2021	Aug 31, 2020	Aug 31, 2019
Total assets	US$ in thousands	6,639,090	6,237,030	4,638,670	4,081,730	3,758,770
Total stockholders’ equity	US$ in thousands	4,120,870	3,286,200	2,294,880	1,889,200	1,623,860
Financial leverage ratio		1.61	1.90	2.02	2.16	2.31

August 31, 2023 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $6,639,090K ÷ $4,120,870K
= 1.61

The financial leverage ratio of Commercial Metals Co. has exhibited a declining trend over the past five years, decreasing from 2.31 in 2019 to 1.61 in 2023. This indicates a reduction in the company's reliance on debt to finance its assets. A decreasing financial leverage ratio suggests a lower level of financial risk and greater financial stability, as the company is using less debt to support its operations. It is important to consider the reasons behind this trend and assess the potential impacts on the company's capital structure and overall financial performance.