Granite Construction Incorporated (GVA)
Financial leverage ratio
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 3,025,660 | 2,813,540 | 2,167,930 | 2,494,930 | 2,380,000 |
| Total stockholders’ equity | US$ in thousands | 1,015,230 | 977,298 | 953,016 | 967,682 | 975,664 |
| Financial leverage ratio | 2.98 | 2.88 | 2.27 | 2.58 | 2.44 |
December 31, 2024 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $3,025,660K ÷ $1,015,230K
= 2.98
Granite Construction Incorporated's financial leverage ratio has exhibited fluctuations in recent years. The ratio increased from 2.44 in December 2020 to 2.58 in December 2021, indicating a slight increase in the company's reliance on debt to finance its operations. However, by December 2022, the financial leverage ratio decreased to 2.27, suggesting a reduction in the proportion of debt used relative to equity.
Subsequently, there was a notable rise in the financial leverage ratio to 2.88 by December 2023, followed by a further increase to 2.98 by December 2024. These last two years showed a consistent upward trend in the ratio, indicating an increasing dependency on debt in relation to equity.
Overall, the fluctuations in Granite Construction Incorporated's financial leverage ratio suggest varying degrees of leverage over the years, with an uptrend in recent periods. It is crucial for stakeholders to monitor this ratio closely as higher leverage can amplify both return potential and risk for the company.
Peer comparison
Dec 31, 2024