Fastenal Company (FAST)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 4,462,900 | 4,548,600 | 4,299,000 | 3,964,700 | 3,799,900 |
| Total stockholders’ equity | US$ in thousands | 3,348,800 | 3,163,200 | 3,042,200 | 2,733,200 | 2,665,600 |
| Financial leverage ratio | 1.33 | 1.44 | 1.41 | 1.45 | 1.43 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $4,462,900K ÷ $3,348,800K
= 1.33
The financial leverage ratio of Fastenal Co. has exhibited some fluctuations over the past five years, ranging from 1.33 in 2023 to 1.45 in 2020. The ratio indicates the extent to which the company relies on debt financing to support its operations and growth. A higher financial leverage ratio generally suggests a higher level of financial risk and debt burden on the company, as more of its assets are financed through borrowing.
Fastenal Co.'s decreasing trend in the financial leverage ratio from 2020 to 2023 reflects a potential shift towards a lower dependence on debt financing relative to equity. This may indicate a more conservative approach to capital structure and potentially reduced financial risk for the company. However, it is essential to consider the specific context and industry norms when interpreting changes in the financial leverage ratio.
Overall, the financial leverage ratio of Fastenal Co. has shown variability over the period under review, and further analysis incorporating other financial metrics and market conditions would be necessary to gain a comprehensive understanding of the company's capital structure and overall financial health.
Peer comparison
Dec 31, 2023