Federal Signal Corporation (FSS)

Financial leverage ratio

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Total assets	US$ in thousands	1,765,200	1,620,500	1,524,300	1,366,100	1,208,800
Total stockholders’ equity	US$ in thousands	1,186,100	1,001,900	860,900	784,000	702,100
Financial leverage ratio		1.49	1.62	1.77	1.74	1.72

December 31, 2024 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $1,765,200K ÷ $1,186,100K
= 1.49

The financial leverage ratio of Federal Signal Corporation has shown fluctuations over the years, starting at 1.72 in 2020 and gradually increasing to 1.77 by the end of 2022. However, there was a notable decrease in the ratio to 1.62 in 2023 and a further drop to 1.49 by the end of 2024. These changes indicate variations in the company's capital structure and its reliance on debt financing. Generally, a higher financial leverage ratio signifies a higher level of debt relative to equity, which can increase financial risk but also potentially enhance returns for shareholders if managed effectively. The decreasing trend in the ratio towards the later years could suggest a shift towards a more conservative approach to financing and a reduced reliance on debt to fund operations and investments.