Goodyear Tire & Rubber Co (GT)
Financial leverage ratio
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 20,964,000 | 21,582,000 | 22,431,000 | 21,402,000 | 16,506,000 |
| Total stockholders’ equity | US$ in thousands | 4,906,000 | 4,668,000 | 5,300,000 | 4,999,000 | 3,078,000 |
| Financial leverage ratio | 4.27 | 4.62 | 4.23 | 4.28 | 5.36 |
December 31, 2024 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $20,964,000K ÷ $4,906,000K
= 4.27
The financial leverage ratio of Goodyear Tire & Rubber Co has shown a declining trend from 5.36 in December 31, 2020, to 4.28 in December 31, 2021, further decreasing to 4.23 in December 31, 2022. Subsequently, the ratio slightly increased to 4.62 in December 31, 2023, but dropped again to 4.27 by December 31, 2024. This trend indicates that the company has been gradually reducing its reliance on debt to finance its operations and investments over the years. A lower financial leverage ratio generally suggests a more conservative capital structure, which may reduce financial risk and improve the company's overall financial health.