Hormel Foods Corporation (HRL)
Financial leverage ratio
| Oct 29, 2023 | Oct 30, 2022 | Oct 31, 2021 | Oct 25, 2020 | Oct 27, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 13,448,800 | 13,306,900 | 12,696,300 | 9,908,280 | 8,109,000 |
| Total stockholders’ equity | US$ in thousands | 7,734,880 | 7,535,280 | 6,972,880 | 6,425,550 | 5,921,460 |
| Financial leverage ratio | 1.74 | 1.77 | 1.82 | 1.54 | 1.37 |
October 29, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $13,448,800K ÷ $7,734,880K
= 1.74
The financial leverage ratio of Hormel Foods Corp. has fluctuated over the past five years. The ratio decreased from 1.77 in 2019 to 1.54 in 2020, indicating a reduction in the company's reliance on debt to finance its operations. Subsequently, there was an increase in the ratio to 1.82 in 2021, suggesting an elevated level of leverage. However, the trend reversed in 2022 and 2023, as the ratio declined to 1.77 and 1.74, respectively, indicating a potential decrease in the company's reliance on debt.
Overall, the fluctuation in the financial leverage ratio reflects changes in Hormel Foods Corp.'s capital structure and its use of debt financing. It is essential to further analyze the company's financial statements and consider macroeconomic conditions to better understand the implications of these fluctuations and their potential impact on the company's financial risk and performance.