Greenbrier Companies Inc (GBX)
Financial leverage ratio
| Aug 31, 2023 | Aug 31, 2022 | Aug 31, 2021 | Aug 31, 2020 | Aug 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 3,978,400 | 3,851,500 | 3,390,700 | 3,173,800 | 2,990,640 |
| Total stockholders’ equity | US$ in thousands | 1,254,600 | 1,276,900 | 1,307,700 | 1,293,040 | 1,276,730 |
| Financial leverage ratio | 3.17 | 3.02 | 2.59 | 2.45 | 2.34 |
August 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $3,978,400K ÷ $1,254,600K
= 3.17
The financial leverage ratio of Greenbrier Cos., Inc. has exhibited an increasing trend over the past five years, reflecting a rise in the company's reliance on debt financing compared to its equity. This suggests that the company has been using more debt to finance its assets and operations. While a higher financial leverage ratio can amplify returns on equity when the company earns more on its investments than the cost of the debt, it also increases the financial risk. Investors and creditors often monitor this trend closely, as a significant increase in the financial leverage ratio can indicate a potentially higher risk and financial vulnerability for the company. Therefore, it is essential for stakeholders to assess the company's ability to meet its debt obligations and the overall impact of this higher leverage on the company's financial performance and stability.
Peer comparison
Aug 31, 2023