Edgewell Personal Care Co (EPC)
Financial leverage ratio
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 3,730,900 | 3,740,700 | 3,713,100 | 3,674,600 | 3,540,900 |
| Total stockholders’ equity | US$ in thousands | 1,584,100 | 1,540,500 | 1,467,100 | 1,590,800 | 1,438,600 |
| Financial leverage ratio | 2.36 | 2.43 | 2.53 | 2.31 | 2.46 |
September 30, 2024 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $3,730,900K ÷ $1,584,100K
= 2.36
The financial leverage ratio for Edgewell Personal Care Co has shown fluctuation over the past five years, ranging from 2.31 in 2021 to 2.53 in 2022. The ratio measures the extent to which the company relies on debt financing as opposed to equity. An increasing ratio signifies higher reliance on debt, which can potentially increase financial risk due to higher interest payments and obligations.
In the case of Edgewell Personal Care Co, the decreasing trend in the financial leverage ratio from 2022 to 2023 suggests a reduction in debt relative to equity in the company's capital structure during that period. This downward shift may indicate a strategic effort by the company to reduce its debt burden and improve its financial stability.
However, the ratio increased again in 2024 to 2.36, moving back towards higher leverage levels. It is essential for the company to manage its debt levels effectively to maintain a healthy balance between debt and equity financing. This will help ensure the company's long-term financial sustainability and ability to meet its financial obligations.
Peer comparison
Sep 30, 2024