HNI Corp (HNI)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 1,928,800 | 1,414,500 | 1,497,900 | 1,418,000 | 1,452,510 |
| Total stockholders’ equity | US$ in thousands | 761,400 | 616,500 | 589,600 | 590,419 | 584,044 |
| Financial leverage ratio | 2.53 | 2.29 | 2.54 | 2.40 | 2.49 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $1,928,800K ÷ $761,400K
= 2.53
The financial leverage ratio of HNI Corp has fluctuated over the past five years, ranging from 2.29 to 2.54. The financial leverage ratio indicates the proportion of a company's debt to its equity financing. A higher financial leverage ratio suggests that the company is relying more on debt to finance its operations, which can magnify returns but also increase financial risk and interest expenses.
HNI Corp's financial leverage ratio increased from 2.29 in 2022 to 2.53 in 2023, indicating a higher level of debt relative to equity in the company's capital structure. This could be due to borrowing to fund growth opportunities or invest in new projects.
In 2021, the financial leverage ratio was at 2.54, the highest among the five years, indicating a relatively higher debt load compared to equity. The company may have actively used debt financing during this period.
The financial leverage ratio in 2020 was 2.40, slightly lower than the previous year, suggesting a decrease in the company's reliance on debt.
In 2019, the financial leverage ratio was 2.49, indicating a moderate level of debt compared to equity in the company's capital structure.
Overall, the fluctuation in HNI Corp's financial leverage ratio over the past five years suggests varying degrees of reliance on debt for financing operations and investments. It will be important for the company to carefully manage its debt levels to balance risk and return in its capital structure.