Kadant Inc (KAI)
Financial leverage ratio
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 1,430,340 | 1,175,660 | 1,149,880 | 1,132,210 | 927,571 |
| Total stockholders’ equity | US$ in thousands | 847,127 | 773,702 | 653,849 | 563,936 | 495,359 |
| Financial leverage ratio | 1.69 | 1.52 | 1.76 | 2.01 | 1.87 |
December 31, 2024 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $1,430,340K ÷ $847,127K
= 1.69
The financial leverage ratio of Kadant Inc has shown fluctuations over the past five years. The ratio increased from 1.87 in December 2020 to 2.01 in December 2021, indicating a higher level of financial leverage. However, in the subsequent years, the ratio decreased to 1.76 in December 2022, 1.52 in December 2023, and then increased slightly to 1.69 in December 2024.
A financial leverage ratio above 1 suggests that the company relies more on debt financing than equity financing. The decrease in the ratio from 2021 to 2023 may indicate a reduction in the company's debt levels or an increase in equity. The slight increase in 2024 suggests a small uptick in the company's leverage compared to the previous year.
Overall, it is essential for Kadant Inc to maintain an optimal financial leverage ratio to balance the benefits and risks associated with debt financing, ensuring long-term financial stability and growth.
Peer comparison
Dec 31, 2024