Federal Signal Corporation (FSS)

Financial leverage ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Total assets	US$ in thousands	1,620,500	1,524,300	1,366,100	1,208,800	1,165,500
Total stockholders’ equity	US$ in thousands	1,001,900	860,900	784,000	702,100	641,600
Financial leverage ratio		1.62	1.77	1.74	1.72	1.82

December 31, 2023 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $1,620,500K ÷ $1,001,900K
= 1.62

Federal Signal Corp.'s financial leverage ratio has shown a fluctuating trend over the past five years. The ratio decreased from 1.82 in 2019 to 1.62 in 2023. This indicates that the company's reliance on debt to finance its operations has decreased over this period. A lower financial leverage ratio suggests that the company has a lower level of debt relative to its equity, which could be viewed positively as it indicates a stronger financial position and less risk of default. However, it is important to note that a decreasing trend in the financial leverage ratio could also indicate a decrease in leverage for potential growth opportunities. Overall, Federal Signal Corp.'s decreasing financial leverage ratio may signal a more conservative approach to debt financing and a strengthening of its capital structure.