Graham Holdings Co (GHC)
Financial leverage ratio
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 7,677,200 | 7,187,730 | 6,582,220 | 7,425,520 | 6,444,120 |
| Total stockholders’ equity | US$ in thousands | 4,256,660 | 3,975,740 | 3,731,380 | 4,399,580 | 3,759,300 |
| Financial leverage ratio | 1.80 | 1.81 | 1.76 | 1.69 | 1.71 |
December 31, 2024 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $7,677,200K ÷ $4,256,660K
= 1.80
The financial leverage ratio for Graham Holdings Co has shown a relatively stable trend over the past five years, ranging from 1.69 to 1.81. This ratio indicates that the company relies more on debt financing than equity to fund its operations and investments.
A financial leverage ratio above 1 suggests that the company has more debt than equity in its capital structure. Graham Holdings Co's increasing trend in the financial leverage ratio from 2020 to 2024 implies a growing reliance on debt to finance its operations and investments during this period.
It is important to note that while debt can provide leverage and tax advantages, it also increases financial risk due to interest payments and potential liquidity challenges. Therefore, stakeholders, including investors and creditors, should carefully monitor the company's financial leverage levels to assess its overall financial health and risk profile.
Peer comparison
Dec 31, 2024