Compass Minerals International Inc (CMP)

Financial leverage ratio

		Sep 30, 2023	Sep 30, 2022	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Total assets	US$ in thousands	1,816,900	1,643,500	2,261,500	2,443,200	2,367,900
Total stockholders’ equity	US$ in thousands	521,000	256,400	378,300	517,700	540,200
Financial leverage ratio		3.49	6.41	5.98	4.72	4.38

September 30, 2023 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $1,816,900K ÷ $521,000K
= 3.49

The financial leverage ratio measures the proportion of a company's debt to its equity and shows the extent to which the company is using debt to finance its operations. Compass Minerals International Inc's financial leverage ratio has displayed a fluctuating pattern over the past five years. In 2023, the ratio stands at 3.52, representing a significant decrease from the previous year's figure of 6.41. This substantial decrease suggests a reduction in the company's reliance on debt financing in relation to its equity. However, it is important to note that the ratio remains relatively higher compared to the ratios in 2018 and 2019, indicating a higher level of leverage in the current period. This shift in the financial leverage position should be closely monitored to assess its impact on the company's overall financial risk and stability.