Insteel Industries Inc (IIIN)
Financial leverage ratio
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 447,513 | 471,745 | 390,710 | 337,902 | 293,009 |
| Total stockholders’ equity | US$ in thousands | 381,505 | 389,744 | 302,038 | 264,803 | 246,017 |
| Financial leverage ratio | 1.17 | 1.21 | 1.29 | 1.28 | 1.19 |
September 30, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $447,513K ÷ $381,505K
= 1.17
The financial leverage ratio measures the extent to which a company relies on debt to finance its operations. In the case of Insteel Industries, Inc., the trend in the financial leverage ratio over the past five years shows fluctuations.
In the most recent period, as of September 30, 2023, the financial leverage ratio stands at 1.17, indicating a decrease from the previous year. This suggests that the company's reliance on debt has decreased, which can be a positive sign for investors and creditors.
Comparing this to the ratio of 1.21 as of October 1, 2022, and 1.29 as of October 2, 2021, it's evident that the company has been gradually reducing its dependence on debt financing, which is generally considered favorable for long-term stability.
However, looking further back, the ratio was at 1.28 as of October 3, 2020, and at 1.19 as of September 28, 2019. These values indicate that the company's reliance on debt was slightly lower in 2023 than in 2019, and the trend has been a fluctuating decrease since 2021.
Overall, the decreasing trend in Insteel Industries, Inc.'s financial leverage ratio over the past five years suggests a positive outlook in terms of the company's ability to sustain operations and manage its financial obligations without being overly burdened by debt. However, it's important to consider the overall industry and economic conditions when evaluating the implications of this trend.
Peer comparison
Sep 30, 2023