KAR Auction Services Inc (KAR)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 4,726,300 | 5,119,800 | 7,450,700 | 6,798,200 | 6,581,200 |
| Total stockholders’ equity | US$ in thousands | 1,327,000 | 1,518,300 | 1,513,000 | 1,615,800 | 1,650,200 |
| Financial leverage ratio | 3.56 | 3.37 | 4.92 | 4.21 | 3.99 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $4,726,300K ÷ $1,327,000K
= 3.56
The financial leverage ratio of Openlane Inc. has exhibited fluctuations over the past five years. The ratio stood at 2.44 as of December 31, 2023, marking a slight increase from the previous year's figure of 2.40. The trend indicates that the company's reliance on debt in relation to equity has been relatively stable in recent years.
Comparing the most recent ratio to the values from earlier years, the ratio was notably higher at 3.53 as of December 31, 2021, but then decreased to 3.14 as of December 31, 2020, and further to 3.99 as of December 31, 2019. These fluctuations suggest varying levels of debt utilization and capital structure adjustments by the company over this period.
Overall, a financial leverage ratio above 1 indicates that the company has more debt than equity in its capital structure, which can amplify returns but also increase financial risk. Openlane Inc. should continue to monitor and manage its financial leverage ratio to ensure a healthy balance between debt and equity financing, aligning with its strategic objectives and risk tolerance.
Peer comparison
Dec 31, 2023