ESAB Corp (ESAB)
Financial leverage ratio
| Dec 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 4,033,980 | 4,084,530 | 3,967,110 | 3,827,490 | 3,828,630 | 3,756,040 | 3,862,840 | 3,849,140 | 3,754,020 | 3,539,900 | 3,673,700 | 3,781,350 | 3,461,260 |
| Total stockholders’ equity | US$ in thousands | 1,769,000 | 1,837,120 | 1,707,970 | 1,640,800 | 1,607,400 | 1,500,810 | 1,506,310 | 1,419,580 | 1,350,210 | 1,209,180 | 1,241,860 | 2,476,850 | 2,460,740 |
| Financial leverage ratio | 2.28 | 2.22 | 2.32 | 2.33 | 2.38 | 2.50 | 2.56 | 2.71 | 2.78 | 2.93 | 2.96 | 1.53 | 1.41 |
December 31, 2024 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $4,033,980K ÷ $1,769,000K
= 2.28
The financial leverage ratio of ESAB Corp has shown a gradual increase from 1.41 as of December 31, 2021, to 2.28 as of December 31, 2024. This indicates that the company's reliance on debt to finance its operations has been increasing over the period under review.
The ratio reached its peak of 2.96 on June 30, 2022, but has since decreased slightly and stabilized around the 2.2 to 2.5 range from September 30, 2023, onwards. This suggests that ESAB Corp has been managing its debt levels more effectively in recent quarters compared to the initial increase in leverage seen in early 2022.
Overall, a financial leverage ratio above 1 indicates that the company has more debt than equity in its capital structure. ESAB Corp's increasing leverage ratio over the period may raise concerns about its ability to meet debt obligations in the long term. It is essential for investors and stakeholders to closely monitor the company's leverage levels to ensure sustainable financial health and stability.
Peer comparison
Dec 31, 2024