Darden Restaurants Inc (DRI)

Financial leverage ratio

		May 26, 2024	May 28, 2023	May 29, 2022	May 30, 2021	May 31, 2020
Total assets	US$ in thousands	11,323,000	10,241,500	10,135,800	10,656,100	9,946,100
Total stockholders’ equity	US$ in thousands	2,242,500	2,201,500	2,198,200	2,813,100	2,331,200
Financial leverage ratio		5.05	4.65	4.61	3.79	4.27

May 26, 2024 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $11,323,000K ÷ $2,242,500K
= 5.05

The financial leverage ratio of Darden Restaurants Inc has shown an upward trend over the past five years, increasing from 3.79 in 2020 to 5.05 in 2024. This indicates that the company's reliance on debt has been steadily increasing during this period. A higher financial leverage ratio suggests that Darden Restaurants has been financing a larger portion of its assets through debt, rather than equity. While this can amplify returns when business is booming, it also exposes the company to higher financial risk, especially in times of economic downturns or rising interest rates. It is important for Darden Restaurants Inc to carefully manage its balance between debt and equity financing to ensure sustainable growth and financial stability.