Eaton Corporation PLC (ETN)
Financial leverage ratio
| 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 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 38,432,000 | 37,289,000 | 36,772,000 | 35,517,000 | 35,014,000 | 34,364,000 | 35,153,000 | 35,208,000 | 34,027,000 | 34,128,000 | 36,804,000 | 34,080,000 | 31,824,000 | 30,985,000 | 30,348,000 | 30,845,000 | 32,805,000 | 31,895,000 | 32,244,000 | 31,649,000 |
| Total stockholders’ equity | US$ in thousands | 19,036,000 | 18,383,000 | 17,953,000 | 17,449,000 | 17,038,000 | 16,068,000 | 16,380,000 | 16,620,000 | 16,413,000 | 15,971,000 | 15,408,000 | 14,995,000 | 14,930,000 | 14,476,000 | 14,188,000 | 14,245,000 | 16,082,000 | 15,848,000 | 16,306,000 | 16,233,000 |
| Financial leverage ratio | 2.02 | 2.03 | 2.05 | 2.04 | 2.06 | 2.14 | 2.15 | 2.12 | 2.07 | 2.14 | 2.39 | 2.27 | 2.13 | 2.14 | 2.14 | 2.17 | 2.04 | 2.01 | 1.98 | 1.95 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $38,432,000K ÷ $19,036,000K
= 2.02
The financial leverage ratio of Eaton Corporation plc has shown some fluctuations over the past eight quarters, ranging from a low of 2.02 in Q4 2023 to a high of 2.15 in Q3 2022. The ratio measures the extent to which the company relies on debt to finance its operations and growth. A ratio above 1 indicates that the company has more debt than equity in its capital structure.
The decreasing trend in the financial leverage ratio from Q3 2022 to Q4 2023 suggests that Eaton Corporation plc may be reducing its reliance on debt financing in favor of equity financing or potentially paying down existing debt. This could be a positive sign, as lower leverage ratios generally indicate lower financial risk and better financial stability for the company.
However, the ratio has shown some variability throughout the quarters, indicating potential shifts in the company's financing strategy at different points in time. It would be important to further analyze the reasons behind these fluctuations and understand the implications for Eaton Corporation plc's overall financial health and performance.
Peer comparison
Dec 31, 2023