Forward Air Corporation (FWRD)

Financial leverage ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Total assets	US$ in thousands	2,979,530	1,208,080	1,117,820	1,047,390	990,878
Total stockholders’ equity	US$ in thousands	764,261	707,244	593,654	547,329	577,182
Financial leverage ratio		3.90	1.71	1.88	1.91	1.72

December 31, 2023 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $2,979,530K ÷ $764,261K
= 3.90

The financial leverage ratio for Forward Air Corporation has shown a significant increase from 1.72 in 2019 to 3.90 in 2023. This indicates a higher degree of financial leverage or reliance on debt to finance the company's assets and operations.

The substantial increase in the financial leverage ratio over the years suggests that Forward Air Corporation has been taking on more debt relative to its equity. While a higher leverage ratio can magnify returns on equity when operating results are positive, it also increases the risk and financial vulnerability of the company, particularly during economic downturns or adverse market conditions.

Investors and creditors should closely monitor the trend in the financial leverage ratio to assess the company's financial health and ability to meet its debt obligations. A continually rising leverage ratio may signal potential challenges in managing debt levels effectively and can impact the company's creditworthiness and overall stability.