KB Home (KBH)

Financial leverage ratio

		Nov 30, 2023	Nov 30, 2022	Nov 30, 2021	Nov 30, 2020	Nov 30, 2019
Total assets	US$ in thousands	6,648,360	6,651,930	5,835,920	5,356,440	5,015,480
Total stockholders’ equity	US$ in thousands	3,810,140	3,660,800	3,019,480	2,665,770	2,383,120
Financial leverage ratio		1.74	1.82	1.93	2.01	2.10

November 30, 2023 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $6,648,360K ÷ $3,810,140K
= 1.74

The financial leverage ratio of KB Home has exhibited a decreasing trend over the past five years, declining from 2.10 in 2019 to 1.74 in 2023. This indicates a reduction in the company's reliance on debt financing to fund its operations and investments. Lower financial leverage ratios can generally be considered favorable as they suggest a lower level of financial risk and a higher capacity for the company to meet its financial obligations. However, it's important to note that a very low leverage ratio might also indicate underutilization of debt for potential growth. Overall, the declining trend in KB Home's financial leverage ratio reflects a more conservative capital structure and improved financial stability.