Dover Corporation (DOV)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 11,348,500 | 10,896,500 | 10,403,600 | 9,152,070 | 8,669,480 |
| Total stockholders’ equity | US$ in thousands | 5,106,600 | 4,286,370 | 4,189,530 | 3,385,770 | 3,032,660 |
| Financial leverage ratio | 2.22 | 2.54 | 2.48 | 2.70 | 2.86 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $11,348,500K ÷ $5,106,600K
= 2.22
The financial leverage ratio of Dover Corp. has exhibited a varying trend over the past five years, with values of 2.86 in 2019, 2.70 in 2020, 2.48 in 2021, 2.54 in 2022, and 2.22 in 2023. A lower financial leverage ratio typically indicates a lower level of financial risk as it suggests that the company is relying less on debt to finance its operations.
The gradual decrease in the financial leverage ratio from 2.86 in 2019 to 2.22 in 2023 could signify that Dover Corp. has been gradually reducing its reliance on debt financing relative to equity financing. This may indicate a more conservative approach to capital structure management, potentially reducing the company's overall financial risk.
However, it is essential to note that a lower financial leverage ratio can also suggest that the company may be underutilizing debt to leverage its operations for potential growth opportunities or cost-saving benefits. Therefore, it is crucial to evaluate the company's specific circumstances and strategic objectives when assessing the implications of its changing financial leverage ratio.
Peer comparison
Dec 31, 2023