Ecolab Inc (ECL)

Financial leverage ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Total assets	US$ in thousands	21,846,600	21,464,300	21,206,400	18,126,000	20,869,100
Total stockholders’ equity	US$ in thousands	8,044,700	7,236,100	7,224,200	6,166,500	8,685,300
Financial leverage ratio		2.72	2.97	2.94	2.94	2.40

December 31, 2023 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $21,846,600K ÷ $8,044,700K
= 2.72

The financial leverage ratio for Ecolab, Inc. has shown some variability over the past five years. The ratio decreased from 2.40 in 2019 to 2.94 in 2020 and remained relatively stable at 2.94 in both 2021 and 2022. However, there was a further decrease to 2.72 in 2023.

A financial leverage ratio of 2.72 in 2023 indicates that for every dollar of equity in the company, there is $2.72 of debt. This suggests that Ecolab, Inc. relies more on debt financing to fund its operations and growth, compared to equity financing. It is essential for investors and stakeholders to monitor changes in the financial leverage ratio over time, as higher leverage can amplify returns in good times but also increases the risk in challenging economic conditions. The decrease in the ratio from 2022 to 2023 may indicate a reduction in the company's debt levels or an increase in equity, which could potentially improve the company's financial stability.