KAR Auction Services Inc (KAR)
Financial leverage ratio
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 4,622,300 | 4,625,800 | 4,617,800 | 4,818,400 | 4,726,300 | 4,729,300 | 4,897,400 | 5,147,900 | 5,119,800 | 5,301,300 | 6,126,000 | 7,792,400 | 7,417,200 | 7,170,200 | 7,118,300 | 7,160,200 | 6,798,200 | 6,909,900 | 6,494,000 | 5,999,700 |
| Total stockholders’ equity | US$ in thousands | 1,996,400 | 1,327,100 | 1,940,700 | 1,942,700 | 1,939,500 | 1,918,100 | 1,946,900 | 2,138,400 | 2,130,800 | 2,146,900 | 612,500 | 2,117,500 | 2,103,900 | 2,063,100 | 2,071,300 | 2,147,300 | 2,165,600 | 2,147,000 | 2,082,700 | 1,571,800 |
| Financial leverage ratio | 2.32 | 3.49 | 2.38 | 2.48 | 2.44 | 2.47 | 2.52 | 2.41 | 2.40 | 2.47 | 10.00 | 3.68 | 3.53 | 3.48 | 3.44 | 3.33 | 3.14 | 3.22 | 3.12 | 3.82 |
December 31, 2024 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $4,622,300K ÷ $1,996,400K
= 2.32
The financial leverage ratio measures the extent to which a company is using debt to finance its operations. A higher ratio indicates higher financial risk due to higher debt levels.
Analyzing KAR Auction Services Inc's financial leverage ratio over the given periods shows fluctuations in the company's leverage position. The ratio was relatively stable around 3 to 3.5 from March 2020 to June 2022. However, in June 2022, the ratio spiked significantly to 10, indicating a substantial increase in debt relative to equity. This sudden spike could raise concerns about the company's financial stability and risk profile.
Subsequently, from September 2022 to December 2024, the financial leverage ratio decreased steadily, reaching a low of 2.32 by December 2024. This downward trend suggests the company made efforts to reduce its debt levels or increase its equity base, improving its financial position and reducing risk.
Overall, while the financial leverage ratio for KAR Auction Services Inc experienced fluctuations during the period under review, the company managed to bring it down to a more stable level by the end of 2024. Investors and stakeholders should monitor the company's leverage levels to assess its financial health and risk profile.
Peer comparison
Dec 31, 2024