Graco Inc (GGG)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 2,722,010 | 2,438,900 | 2,443,200 | 1,988,130 | 1,692,210 |
| Total stockholders’ equity | US$ in thousands | 2,224,220 | 1,859,650 | 1,709,340 | 1,283,900 | 1,024,930 |
| Financial leverage ratio | 1.22 | 1.31 | 1.43 | 1.55 | 1.65 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $2,722,010K ÷ $2,224,220K
= 1.22
The financial leverage ratio of Graco Inc has exhibited a declining trend over the past five years. The ratio decreased from 1.65 in 2019 to 1.22 in 2023. A lower financial leverage ratio indicates that the company is relying less on debt to finance its operations and investments, which could be viewed positively by investors and creditors as it signifies lower financial risk.
This gradual reduction in the financial leverage ratio could signal that Graco Inc has been focusing on improving its capital structure by reducing its reliance on debt financing. It may also indicate that the company has been able to generate sufficient internal funds to support its growth and operations without taking on excessive debt.
Overall, the declining trend in the financial leverage ratio of Graco Inc suggests a more conservative approach to capital structure management, potentially leading to improved financial stability and flexibility for the company in the long term.
Peer comparison
Dec 31, 2023