Huntington Ingalls Industries Inc (HII)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 11,215,000 | 10,857,000 | 10,627,000 | 8,157,000 | 7,031,000 |
| Total stockholders’ equity | US$ in thousands | 4,093,000 | 3,489,000 | 2,808,000 | 1,901,000 | 1,588,000 |
| Financial leverage ratio | 2.74 | 3.11 | 3.78 | 4.29 | 4.43 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $11,215,000K ÷ $4,093,000K
= 2.74
The financial leverage ratio of Huntington Ingalls Industries Inc has shown a decreasing trend over the past five years, indicating an improvement in the company's overall financial leverage position. The ratio decreased from 4.43 in 2019 to 2.74 in 2023.
A lower financial leverage ratio suggests that the company is relying less on debt financing and has a stronger equity base to support its operations. This can be seen as a positive sign of financial health and stability as it indicates a reduced level of financial risk.
However, it is important to note that a very low leverage ratio may also imply underutilization of debt, which could potentially limit the company's growth opportunities. Therefore, a balance between debt and equity financing should be maintained to optimize the company's capital structure and overall performance.
Peer comparison
Dec 31, 2023