Edgewell Personal Care Co (EPC)
Financial leverage ratio
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 3,740,700 | 3,713,100 | 3,674,600 | 3,540,900 | 3,420,900 |
| Total stockholders’ equity | US$ in thousands | 1,540,500 | 1,467,100 | 1,590,800 | 1,438,600 | 1,303,500 |
| Financial leverage ratio | 2.43 | 2.53 | 2.31 | 2.46 | 2.62 |
September 30, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $3,740,700K ÷ $1,540,500K
= 2.43
The financial leverage ratio, also known as the equity multiplier, measures the extent to which a company is utilizing debt to finance its assets. A higher financial leverage ratio indicates higher financial risk due to increased reliance on debt financing.
In the case of Edgewell Personal Care Co, the trend in the financial leverage ratio over the past five years shows some fluctuation. The ratio decreased from 2.62 in 2019 to 2.32 in 2021, before increasing to 2.54 in 2022 and then slightly decreasing to 2.43 in 2023.
The decrease in the financial leverage ratio from 2019 to 2021 suggests a reduction in the company's reliance on debt financing to support its assets. However, the subsequent increase in 2022 and the slight decrease in 2023 may indicate a shift back towards utilizing more debt.
Overall, it is important to closely monitor the financial leverage ratio as it reflects the company's capital structure and the potential impact on its financial risk and stability. The trend observed in the financial leverage ratio for Edgewell Personal Care Co highlights the dynamic nature of its financing decisions and the need for continual assessment of its leverage position.
Peer comparison
Sep 30, 2023