Emerson Electric Company (EMR)

Financial leverage ratio

		Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019
Total assets	US$ in thousands	44,246,000	45,585,000	46,440,000	46,513,000	42,746,000	44,173,000	36,147,000	36,241,000	35,672,000	37,042,000	29,497,000	26,959,000	24,715,000	24,484,000	23,800,000	23,678,000	22,882,000	21,730,000	21,711,000	21,101,000
Total stockholders’ equity	US$ in thousands	21,636,000	20,799,000	20,900,000	20,674,000	20,689,000	20,464,000	11,360,000	10,727,000	10,364,000	10,315,000	10,575,000	10,249,000	9,883,000	9,291,000	9,130,000	8,895,000	8,405,000	7,831,000	7,517,000	8,421,000
Financial leverage ratio		2.05	2.19	2.22	2.25	2.07	2.16	3.18	3.38	3.44	3.59	2.79	2.63	2.50	2.64	2.61	2.66	2.72	2.77	2.89	2.51

September 30, 2024 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $44,246,000K ÷ $21,636,000K
= 2.05

The financial leverage ratio of Emerson Electric Company has exhibited some fluctuations over the past several quarters. The ratio measures the proportion of the company's debt to its equity, reflecting its reliance on debt financing.

From the data provided, it is observed that the financial leverage ratio has ranged from a low of 2.05 to a high of 3.59 over the past two years. The ratio peaked at 3.59 in the second quarter of 2022, indicating a higher level of debt relative to equity during that period. Subsequently, there was a notable decline in the ratio to 2.50 in the first quarter of 2023, which suggests a potential deleveraging or a shift towards a more conservative capital structure.

The ratio then fluctuated in a narrower range between 2.07 and 2.25 until the end of the third quarter of 2024, indicating a relatively stable debt-to-equity mix during this period. It is worth noting that a financial leverage ratio above 2 generally implies that the company has more debt than equity in its capital structure.

Overall, the trend in Emerson Electric Company's financial leverage ratio shows some variability, reflecting changes in its capital structure decisions and debt management strategies over the analyzed period. It is important for investors and analysts to closely monitor this ratio to assess the company's financial risk and ability to meet its financial obligations.