Eaton Corporation PLC (ETN)
Financial leverage ratio
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 38,381,000 | 38,432,000 | 35,030,000 | 34,027,000 | 31,824,000 |
| Total stockholders’ equity | US$ in thousands | 18,488,000 | 19,036,000 | 17,038,000 | 16,413,000 | 14,930,000 |
| Financial leverage ratio | 2.08 | 2.02 | 2.06 | 2.07 | 2.13 |
December 31, 2024 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $38,381,000K ÷ $18,488,000K
= 2.08
The financial leverage ratio of Eaton Corporation PLC has shown a gradual decline over the past five years, from 2.13 in December 2020 to 2.08 in December 2024. This indicates that the company has been effectively managing its debt levels relative to its equity, resulting in a decreasing trend in leverage. A lower financial leverage ratio suggests a lower reliance on debt financing, which can be viewed positively by investors and creditors as it signifies a lower risk of financial distress. Overall, the consistent decrease in the financial leverage ratio reflects Eaton Corporation PLC's commitment to maintaining a prudent capital structure and managing its financial risk efficiently.
Peer comparison
Dec 31, 2024