ITT Inc (ITT)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 3,932,600 | 3,780,300 | 3,565,400 | 4,277,600 | 4,107,700 |
| Total stockholders’ equity | US$ in thousands | 2,528,200 | 2,248,100 | 2,225,800 | 2,126,400 | 2,074,900 |
| Financial leverage ratio | 1.56 | 1.68 | 1.60 | 2.01 | 1.98 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $3,932,600K ÷ $2,528,200K
= 1.56
Looking at the trend of ITT Inc's financial leverage ratio over the past five years, we can see fluctuations in the levels of leverage. The financial leverage ratio measures the extent to which the company relies on debt to finance its operations.
In 2023, the financial leverage ratio decreased to 1.56 from 1.68 in 2022, indicating a lower level of debt usage relative to equity in the capital structure. This may suggest that ITT Inc reduced its reliance on debt financing or increased its equity base during the year.
Comparing to 2023, the financial leverage ratio was relatively lower in 2021 at 1.60. This indicates that the company had a slightly lower proportion of debt in its capital structure in 2021 compared to 2023.
In contrast, the financial leverage ratio was significantly higher in 2020 at 2.01, implying a higher level of debt use relative to equity. This might indicate that ITT Inc had a more leveraged position in 2020, potentially increasing its financial risk.
Similarly, in 2019, the financial leverage ratio was 1.98, showing a comparable level of leverage to 2020. This suggests that ITT Inc maintained a relatively high level of debt compared to equity in 2019.
Overall, ITT Inc's financial leverage ratio has demonstrated variability over the past five years, with fluctuations indicating changes in the company's capital structure and debt management strategies. Monitoring this ratio can provide insights into the company's financial risk and its ability to meet its debt obligations.
Peer comparison
Dec 31, 2023