Enerpac Tool Group Corp (EPAC)
Financial leverage ratio
| Aug 31, 2023 | Aug 31, 2022 | Aug 31, 2021 | Aug 31, 2020 | Aug 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 762,597 | 757,312 | 820,247 | 824,294 | 1,124,270 |
| Total stockholders’ equity | US$ in thousands | 326,620 | 318,611 | 412,198 | 359,226 | 301,179 |
| Financial leverage ratio | 2.33 | 2.38 | 1.99 | 2.29 | 3.73 |
August 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $762,597K ÷ $326,620K
= 2.33
The financial leverage ratio is a measure of the extent to which a company uses debt to finance its operations and assets. It is calculated by dividing the company's total assets by its equity. A high financial leverage ratio indicates that a company has a significant portion of its assets financed through debt, while a low ratio suggests that equity is the primary source of financing.
Analyzing the financial leverage ratio of Enerpac Tool Group Corp over the past five years, we observe the following trends:
1. Aug 31, 2023: The financial leverage ratio was 2.33, indicating that for every dollar of equity, Enerpac Tool Group Corp had $2.33 in total assets. This suggests that the company's reliance on debt to finance its assets had slightly decreased compared to the previous year.
2. Aug 31, 2022: The financial leverage ratio was 2.38, reflecting a similar trend to the previous year. The ratio suggests that the company's financial leverage remained relatively high, with a slight increase from the previous year.
3. Aug 31, 2021: The financial leverage ratio was 1.99, showing a decrease from the previous year. This decrease indicates that the company relied less on debt financing and had a higher proportion of its assets funded by equity.
4. Aug 31, 2020: The financial leverage ratio was 2.29, reflecting an increase from the previous year. This suggests that Enerpac Tool Group Corp had slightly increased its reliance on debt financing to support its operations and asset base.
5. Aug 31, 2019: The financial leverage ratio was 3.73, indicating a significant increase in the company's reliance on debt compared to the previous year. This high ratio suggests that Enerpac Tool Group Corp had leveraged its assets significantly through debt financing.
In summary, the trend in Enerpac Tool Group Corp's financial leverage ratio indicates fluctuations in its reliance on debt financing over the past five years. It is important for stakeholders to monitor these changes to assess the company's risk exposure and financial stability. While some fluctuation is normal, significant and consistent increases in the financial leverage ratio may raise concerns about the company's ability to meet its debt obligations and manage financial risk.
Peer comparison
Aug 31, 2023