Henry Schein Inc (HSIC)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 10,573,000 | 8,607,000 | 8,481,000 | 7,773,000 | 7,151,100 |
| Total stockholders’ equity | US$ in thousands | 3,655,000 | 3,446,000 | 3,425,000 | 3,348,170 | 2,998,040 |
| Financial leverage ratio | 2.89 | 2.50 | 2.48 | 2.32 | 2.39 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $10,573,000K ÷ $3,655,000K
= 2.89
The financial leverage ratio measures the extent to which a company uses debt to finance its operations compared to its equity. In the case of Henry Schein Inc, the trend of the financial leverage ratio over the past five years shows an increasing pattern from 2.39 in 2019 to 2.89 in 2023. This indicates that the company has been relying more on debt to fund its operations and growth.
A financial leverage ratio of 2.89 in 2023 means that for every dollar of equity, Henry Schein Inc has approximately $2.89 of debt. This level of leverage suggests that the company has a significant amount of debt relative to its equity, which can pose risks in terms of financial stability and ability to meet debt obligations in adverse conditions.
Investors and creditors typically monitor changes in the financial leverage ratio closely, as a significant increase in leverage can signal heightened financial risk. It is important for the company to carefully manage its debt levels to ensure a healthy balance between debt and equity financing. Further analysis of other financial metrics and industry benchmarks would provide a more holistic view of Henry Schein Inc's financial health and risk profile.
Peer comparison
Dec 31, 2023