Johnson Controls International PLC (JCI)
Financial leverage ratio
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 42,242,000 | 42,158,000 | 41,890,000 | 40,815,000 | 42,287,000 |
| Total stockholders’ equity | US$ in thousands | 16,545,000 | 16,268,000 | 17,562,000 | 17,447,000 | 19,766,000 |
| Financial leverage ratio | 2.55 | 2.59 | 2.39 | 2.34 | 2.14 |
September 30, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $42,242,000K ÷ $16,545,000K
= 2.55
The financial leverage ratio, also known as the debt-to-equity ratio, measures the proportion of a company's financing that comes from debt relative to equity. A higher financial leverage ratio indicates a higher level of financial risk due to higher reliance on debt financing.
Analyzing the financial leverage ratios of Johnson Controls International plc for the past five years, we observe the following trends:
- In 2023, the financial leverage ratio stands at 2.55, indicating that for every dollar of equity, the company has $2.55 in debt. This suggests a slight decrease from the previous year and signifies a moderate level of leverage.
- Comparing this to the previous year, where the ratio was 2.59, we note a minor decrease in reliance on debt financing.
- The year 2021 saw a financial leverage ratio of 2.39, reflecting an increase from the previous year. This suggests a higher proportion of debt relative to equity compared to the prior year.
- In 2020, the financial leverage ratio was 2.34, showing a slight increase from the previous year. This indicates a higher reliance on debt financing compared to the prior year.
- The year 2019 saw a financial leverage ratio of 2.14, which was lower than the subsequent years. This indicates a lower level of leverage and suggests more conservative financing structures in previous years.
Overall, the trend in Johnson Controls International plc's financial leverage ratio indicates fluctuation in the company's reliance on debt financing over the past five years. It is essential to assess this ratio in conjunction with other financial metrics to gain a comprehensive understanding of the company's capital structure and risk profile.
Peer comparison
Sep 30, 2023