Group 1 Automotive Inc (GPI)

Financial leverage ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Total assets	US$ in thousands	7,774,100	6,717,500	5,749,400	5,089,400	5,570,200
Total stockholders’ equity	US$ in thousands	2,674,400	2,237,500	1,825,200	1,449,600	1,255,700
Financial leverage ratio		2.91	3.00	3.15	3.51	4.44

December 31, 2023 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $7,774,100K ÷ $2,674,400K
= 2.91

The financial leverage ratio of Group 1 Automotive, Inc. has shown a decreasing trend over the past five years, declining from 4.44 in 2019 to 2.91 in 2023. This indicates that the company's reliance on debt to finance its operations has reduced over time. A lower financial leverage ratio suggests that the company has a lower level of debt relative to its equity, which can be viewed positively by investors and creditors as it signifies a lower financial risk. Group 1 Automotive, Inc. has been successful in improving its capital structure by reducing its debt levels compared to equity, which could potentially enhance its financial stability and flexibility in managing its obligations. However, it is essential to continue monitoring this ratio to assess the company's ongoing leverage and financial risk profile.