Genuine Parts Co (GPC)
Financial leverage ratio
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 17,968,500 | 17,021,900 | 16,941,600 | 16,907,500 | 16,495,400 | 16,377,100 | 16,238,200 | 16,273,300 | 14,352,100 | 13,974,900 | 14,086,000 | 13,943,500 | 13,440,200 | 13,475,500 | 13,264,000 | 14,451,400 | 14,645,600 | 14,513,200 | 14,639,500 | 14,070,500 |
| Total stockholders’ equity | US$ in thousands | 4,401,050 | 4,186,110 | 4,071,210 | 3,926,200 | 3,790,360 | 3,664,450 | 3,640,560 | 3,595,740 | 3,490,740 | 3,183,180 | 3,233,880 | 3,324,560 | 3,204,800 | 3,014,080 | 2,849,280 | 3,402,700 | 3,674,710 | 3,642,190 | 3,665,330 | 3,550,930 |
| Financial leverage ratio | 4.08 | 4.07 | 4.16 | 4.31 | 4.35 | 4.47 | 4.46 | 4.53 | 4.11 | 4.39 | 4.36 | 4.19 | 4.19 | 4.47 | 4.66 | 4.25 | 3.99 | 3.98 | 3.99 | 3.96 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $17,968,500K ÷ $4,401,050K
= 4.08
The financial leverage ratio of Genuine Parts Co. has shown a fluctuating trend over the past eight quarters. The ratio ranged from 4.08 to 4.53 during this period.
A financial leverage ratio of 4.08 to 4.53 indicates that the company has a significant level of financial leverage, with a higher proportion of debt funding the company's operations compared to equity. This suggests that the company relies more on debt to finance its assets and operations, which can amplify returns but also increase financial risk.
The decreasing trend from Q1 2022 to Q4 2023, starting at 4.35 and declining to 4.08, may indicate that the company has reduced its reliance on debt financing over this period. This could be a strategic shift by Genuine Parts Co. to lower its financial risk and improve its financial stability.
Overall, Genuine Parts Co.'s financial leverage ratio analysis shows that the company has been managing its debt levels relative to equity over the past eight quarters, with a noticeable reduction in financial leverage towards the end of the period.