Encompass Health Corp (EHC)
Financial leverage ratio
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 6,534,700 | 6,102,400 | 5,636,500 | 6,864,900 | 6,445,900 |
| Total stockholders’ equity | US$ in thousands | 2,067,000 | 1,647,500 | 1,310,300 | 1,911,300 | 1,588,000 |
| Financial leverage ratio | 3.16 | 3.70 | 4.30 | 3.59 | 4.06 |
December 31, 2024 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $6,534,700K ÷ $2,067,000K
= 3.16
The financial leverage ratio of Encompass Health Corp has fluctuated over the past five years, ranging from a high of 4.30 in December 31, 2022, to a low of 3.16 in December 31, 2024. This ratio indicates the company's reliance on debt financing to support its operations and growth initiatives. A higher financial leverage ratio suggests a greater proportion of debt in the company's capital structure, which can increase financial risk but also potentially lead to higher returns on equity. Conversely, a lower ratio indicates a smaller reliance on debt financing, which may reduce financial risk but could also limit growth opportunities. Encompass Health Corp should carefully manage its financial leverage ratio to ensure a healthy balance between debt and equity to support sustainable growth and profitability.
Peer comparison
Dec 31, 2024