Commercial Metals Company (CMC)

Financial leverage ratio

		Aug 31, 2024	May 31, 2024	Feb 29, 2024	Nov 30, 2023	Aug 31, 2023	May 31, 2023	Feb 28, 2023	Nov 30, 2022	Aug 31, 2022	May 31, 2022	Feb 28, 2022	Nov 30, 2021	Aug 31, 2021	May 31, 2021	Feb 28, 2021	Nov 30, 2020	Aug 31, 2020	May 31, 2020	Feb 29, 2020	Nov 30, 2019
Total assets	US$ in thousands	6,817,840	6,710,230	6,662,260	6,695,170	6,639,090	6,639,090	6,639,090	6,639,090	6,237,030	6,103,700	5,504,220	4,725,260	4,638,670	4,391,080	4,064,040	4,016,670	4,081,730	3,954,890	3,907,940	3,808,350
Total stockholders’ equity	US$ in thousands	4,299,780	4,258,810	4,222,450	4,229,740	4,120,870	4,023,380	3,782,960	3,584,000	3,286,200	3,141,940	2,869,720	2,485,960	2,294,880	2,156,370	2,009,260	1,934,690	1,889,200	1,800,450	1,757,840	1,701,500
Financial leverage ratio		1.59	1.58	1.58	1.58	1.61	1.65	1.75	1.85	1.90	1.94	1.92	1.90	2.02	2.04	2.02	2.08	2.16	2.20	2.22	2.24

August 31, 2024 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $6,817,840K ÷ $4,299,780K
= 1.59

The financial leverage ratio of Commercial Metals Company has shown a general increasing trend over the past several quarters, indicating a higher level of leverage in the company's capital structure. The ratio has been consistently above 1, suggesting that the company has been using debt financing to support its operations and investments.

The ratio reached a peak of 2.24 at the end of November 2019 and has fluctuated around that level since then. The increase in the financial leverage ratio reflects the company's reliance on debt to fund its growth and expansion activities.

A financial leverage ratio above 1 signifies that the company has more debt than equity in its capital structure, which can magnify returns on equity when times are good but also increase financial risk during economic downturns. It is essential for stakeholders to closely monitor the company's ability to manage its debt levels effectively and service its debt obligations in a sustainable manner.