Griffon Corporation (GFF)
Financial leverage ratio
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 2,370,950 | 2,418,880 | 2,816,470 | 2,604,680 | 2,448,590 |
| Total stockholders’ equity | US$ in thousands | 224,888 | 315,244 | 477,570 | 807,158 | 700,151 |
| Financial leverage ratio | 10.54 | 7.67 | 5.90 | 3.23 | 3.50 |
September 30, 2024 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $2,370,950K ÷ $224,888K
= 10.54
Griffon Corporation's financial leverage ratio has shown a consistent upward trend over the past five years, increasing from 3.50 in 2020 to 10.54 in 2024. This indicates that the company has been relying more on debt to finance its operations and investments relative to its equity. The significant rise in the financial leverage ratio suggests that Griffon Corporation has been taking on a higher level of financial risk over the years. Investors and creditors may view this trend as a concern, as higher levels of debt can increase the company's vulnerability to economic downturns and interest rate fluctuations. It is important for Griffon Corporation to closely monitor and manage its debt levels to maintain a healthy balance between debt and equity financing.