JB Hunt Transport Services Inc (JBHT)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 8,538,000 | 7,787,000 | 6,794,000 | 5,928,350 | 5,470,850 |
| Total stockholders’ equity | US$ in thousands | 4,103,760 | 3,666,770 | 3,117,820 | 2,600,140 | 2,267,030 |
| Financial leverage ratio | 2.08 | 2.12 | 2.18 | 2.28 | 2.41 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $8,538,000K ÷ $4,103,760K
= 2.08
The financial leverage ratio of J.B. Hunt Transport Services, Inc. has been gradually decreasing over the past five years, indicating a trend towards lower financial leverage. The ratio decreased from 2.41 in 2019 to 2.08 in 2023.
A financial leverage ratio above 1 indicates that the company relies more on debt financing than equity financing to fund its operations. A decreasing trend in the financial leverage ratio suggests that the company is becoming less reliant on debt to finance its operations, which can be considered a positive sign as it may reduce the company's financial risk and potential bankruptcy risk.
However, it is important to note that a lower financial leverage ratio may also indicate lower profitability compared to peers who may be using more leverage to generate higher returns. It is essential for investors and stakeholders to consider the company's overall financial strategy, industry dynamics, and market conditions when interpreting the financial leverage ratio.
Peer comparison
Dec 31, 2023