Heritage Financial Corporation (HFWA)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 7,174,960 | 6,980,100 | 7,432,410 | 6,615,320 | 5,552,970 |
| Total stockholders’ equity | US$ in thousands | 853,261 | 797,893 | 854,432 | 820,439 | 809,311 |
| Financial leverage ratio | 8.41 | 8.75 | 8.70 | 8.06 | 6.86 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $7,174,960K ÷ $853,261K
= 8.41
The financial leverage ratio of Heritage Financial Corp. has shown a fluctuating trend over the past five years. The ratio increased from 6.86 in 2019 to 8.41 in 2023, indicating an overall uptrend in the company's reliance on debt to finance its operations.
In 2020, there was a noticeable increase in the financial leverage ratio to 8.06, which suggests a higher proportion of debt in the company's capital structure compared to the previous year. However, the ratio peaked at 8.75 in 2022 before showing a slight decrease to 8.70 in 2021.
The elevated levels of the financial leverage ratio over the years may imply that Heritage Financial Corp. has been more leveraged and exposed to financial risk due to its reliance on debt financing. It is essential for stakeholders to monitor the company's leverage levels closely to assess its ability to meet its debt obligations and manage financial stability effectively.