FedEx Corporation (FDX)
Financial leverage ratio
| May 31, 2025 | May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 87,663,000 | 87,007,000 | 87,110,000 | 85,994,000 | 82,777,000 |
| Total stockholders’ equity | US$ in thousands | 28,074,000 | 27,582,000 | 26,088,000 | 24,939,000 | 24,168,000 |
| Financial leverage ratio | 3.12 | 3.15 | 3.34 | 3.45 | 3.43 |
May 31, 2025 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $87,663,000K ÷ $28,074,000K
= 3.12
The financial leverage ratio of FedEx Corporation exhibits a gradual declining trend over the specified period from May 31, 2021, to May 31, 2025. Specifically, the ratio was recorded at 3.43 in 2021, increased slightly to 3.45 in 2022, indicating a marginal rise in the company's reliance on debt relative to shareholders' equity during that year. Subsequently, the ratio experienced a decline to 3.34 in 2023, followed by a more pronounced decrease to 3.15 in 2024, and further down to 3.12 in 2025.
This pattern suggests a consistent movement towards reduced financial leverage over the four-year span. The decreasing leverage ratio could reflect a strategic shift towards deleveraging, potentially improving the company's financial stability or reducing risk associated with high debt levels. It indicates that FedEx has been gradually lowering its reliance on debt financing, possibly through debt repayment or an increase in equity, thus diminishing overall financial risk while maintaining operational efficiency.
Overall, the trend in FedEx’s financial leverage ratio points to a deliberate effort to stabilize its capital structure, with the ratio remaining within a moderate range. This cautious approach to leverage may enhance the company's capacity to withstand financial uncertainties and support future growth initiatives with a more balanced financial structure.