Granite Construction Incorporated (GVA)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 2,813,540 | 2,167,930 | 2,494,930 | 2,380,000 | 2,502,090 |
| Total stockholders’ equity | US$ in thousands | 977,298 | 953,016 | 967,682 | 975,664 | 1,141,470 |
| Financial leverage ratio | 2.88 | 2.27 | 2.58 | 2.44 | 2.19 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $2,813,540K ÷ $977,298K
= 2.88
Granite Construction Inc.'s financial leverage ratio has exhibited variability over the past five years. The ratio measures the degree to which the company is utilizing debt to finance its operations and investments. A higher financial leverage ratio indicates a higher level of financial risk due to increased reliance on debt financing.
In 2023, the financial leverage ratio increased significantly to 2.88 compared to the previous year, suggesting that the company took on more debt relative to its equity. This could potentially increase the company's financial risk and interest expense.
In 2022, the financial leverage ratio was lower at 2.27, indicating less reliance on debt compared to the following year. This may reflect a more conservative financial approach by the company.
In 2021, the financial leverage ratio rose to 2.58, indicating an increase in the company's debt utilization compared to the prior year. This could have been driven by expansion plans, acquisitions, or other investment activities.
In 2020, the financial leverage ratio was slightly lower at 2.44, suggesting a moderation in the company's debt levels compared to 2021.
In 2019, Granite Construction Inc. had a financial leverage ratio of 2.19, indicating a lower level of leverage compared to the subsequent years.
Overall, the fluctuation in the financial leverage ratio of Granite Construction Inc. over the past five years may reflect varying strategic decisions regarding capital structure, growth initiatives, and risk management. Investors and stakeholders should monitor these changes to assess the company's financial health and risk profile.
Peer comparison
Dec 31, 2023