Coty Inc (COTY)

Financial leverage ratio

		Jun 30, 2024	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020
Total assets	US$ in thousands	12,082,500	12,661,600	12,116,100	13,691,400	16,728,800
Total stockholders’ equity	US$ in thousands	3,827,100	3,811,100	3,154,500	2,860,700	3,004,600
Financial leverage ratio		3.16	3.32	3.84	4.79	5.57

June 30, 2024 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $12,082,500K ÷ $3,827,100K
= 3.16

The financial leverage ratio for Coty Inc has shown a declining trend over the past five years, decreasing from 5.57 in 2020 to 3.16 in 2024. This indicates that the company's reliance on debt to finance its operations has reduced over this period. A lower financial leverage ratio is generally considered favorable as it suggests lower financial risk and more conservative capital structure. However, it is important to note that a very low leverage ratio may also indicate underutilization of debt for potential growth or inefficient capital structure. Therefore, it is essential for Coty Inc to strike a balance between utilizing debt efficiently for growth opportunities and maintaining a healthy financial position with a reasonable level of leverage.