WW Grainger Inc (GWW)
Financial leverage ratio
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 8,829,000 | 8,147,000 | 7,588,000 | 6,592,000 | 6,295,000 |
| Total stockholders’ equity | US$ in thousands | 3,703,000 | 3,115,000 | 2,735,000 | 2,160,000 | 2,093,000 |
| Financial leverage ratio | 2.38 | 2.62 | 2.77 | 3.05 | 3.01 |
December 31, 2024 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $8,829,000K ÷ $3,703,000K
= 2.38
The financial leverage ratio of WW Grainger Inc has shown a decreasing trend over the past five years, indicating a reduction in the company's reliance on debt to finance its operations. As of December 31, 2020, the ratio was 3.01, and it increased slightly to 3.05 by December 31, 2021. However, from 2022 to 2024, there was a noticeable decline in the ratio, reaching 2.38 by December 31, 2024.
This decreasing trend suggests that WW Grainger Inc has been able to strengthen its financial position by reducing its debt levels relative to its equity. A lower financial leverage ratio signifies a lower amount of debt financing compared to equity, which can indicate improved financial stability and reduced financial risk for the company. Overall, this trend indicates a positive shift towards a more balanced capital structure for WW Grainger Inc.