Graham Holdings Co (GHC)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 7,187,730 | 6,553,380 | 7,425,520 | 6,444,120 | 5,931,240 |
| Total stockholders’ equity | US$ in thousands | 3,975,740 | 3,731,380 | 4,399,580 | 3,759,300 | 3,319,240 |
| Financial leverage ratio | 1.81 | 1.76 | 1.69 | 1.71 | 1.79 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $7,187,730K ÷ $3,975,740K
= 1.81
The financial leverage ratio of Graham Holdings Co. has exhibited some fluctuation over the past five years. The ratio increased from 1.71 in 2020 to 1.76 in 2022 before slightly declining to 1.81 in 2023. This indicates that the company has been relying more on debt financing relative to its equity over the period.
A financial leverage ratio above 1 typically suggests that the company is using more debt to finance its operations, indicating a higher degree of financial risk. In the case of Graham Holdings Co., the trend in the financial leverage ratio over the years suggests a gradual increase in leverage, which could imply an increased risk for the company in terms of debt repayment obligations and financial stability.
It is important for stakeholders and investors to closely monitor the financial leverage ratio of Graham Holdings Co. to assess the company's ability to manage its debt levels effectively and sustain its financial health in the long term. The fluctuations in the ratio over the years indicate the changing capital structure and financial risk profile of the company, which may require further investigation and analysis.
Peer comparison
Dec 31, 2023