CNH Industrial N.V. (CNH)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 46,267,000 | 39,381,000 | 6,789,000 | 48,719,000 | 47,352,000 |
| Total stockholders’ equity | US$ in thousands | 8,234,000 | 6,976,000 | 6,853,000 | 5,029,000 | 6,156,000 |
| Financial leverage ratio | 5.62 | 5.65 | 0.99 | 9.69 | 7.69 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $46,267,000K ÷ $8,234,000K
= 5.62
The financial leverage ratio of CNH Industrial N.V. has fluctuated over the past five years, ranging from 0.99 in 2021 to 9.69 in 2020.
A high financial leverage ratio indicates that the company relies heavily on debt to finance its operations and investments, which can increase financial risk and interest expenses.
In 2020, the ratio spiked to 9.69, suggesting a significant increase in the company's debt relative to its equity. This could have been due to various factors such as aggressive expansion plans, acquisitions, or economic downturn impacting profitability.
Conversely, in 2021, the ratio dropped to 0.99, indicating a low proportion of debt in the company's capital structure relative to equity. This could reflect a deleveraging strategy, improved profitability, or a reduction in debt levels during that year.
Overall, investors and stakeholders should monitor CNH Industrial N.V.'s financial leverage ratio closely to assess the company's debt levels, financial risk, and ability to meet its debt obligations in the long term.
Peer comparison
Dec 31, 2023