Flowers Foods Inc (FLO)

Financial leverage ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Total assets	US$ in thousands	3,426,950	3,312,990	3,253,310	3,323,020	3,177,780
Total stockholders’ equity	US$ in thousands	1,351,780	1,443,290	1,411,270	1,372,990	1,263,430
Financial leverage ratio		2.54	2.30	2.31	2.42	2.52

December 31, 2023 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $3,426,950K ÷ $1,351,780K
= 2.54

Flowers Foods Inc's financial leverage ratio has exhibited fluctuations over the past five years. In 2023, the ratio stands at 2.54, indicating that the company's level of debt relative to equity has increased compared to the previous year. This suggests a higher reliance on debt financing, which may pose risks in terms of financial stability and the company's ability to meet its debt obligations.

It is noteworthy that the ratio in 2023 is higher than in 2022 but remains within the range of values observed in the preceding years. This implies that while the company's leverage has increased, it is not significantly diverging from historical levels. However, management should be cautious about the continued upward trend in leverage, as it may signal a shift towards a riskier capital structure.

Analyzing the trend over the last five years, we observe a slight increase in financial leverage from 2.42 in 2020 to 2.54 in 2023. This suggests a gradual buildup of debt relative to equity, which could potentially impact the company's creditworthiness and financial flexibility in the future.

In conclusion, the financial leverage ratio of Flowers Foods Inc has shown variability in recent years, with a notable increase in 2023. Management should closely monitor the company's debt levels and consider implementing strategies to maintain a suitable balance between debt and equity to safeguard the company's financial health and stability.