Knowles Cor (KN)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 1,462,800 | 1,183,900 | 1,731,600 | 1,654,900 | 1,654,600 |
| Total stockholders’ equity | US$ in thousands | 1,034,100 | 992,900 | 1,459,500 | 1,303,500 | 1,288,500 |
| Financial leverage ratio | 1.41 | 1.19 | 1.19 | 1.27 | 1.28 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $1,462,800K ÷ $1,034,100K
= 1.41
The financial leverage ratio of Knowles Corp has shown fluctuations over the past five years. The ratio increased from 1.19 in 2019 to 1.41 in 2020, indicating higher financial leverage in 2020. Subsequently, there was a slight decrease to 1.27 in 2021, followed by stability at 1.19 in both 2022 and 2023, suggesting a more conservative approach to leverage in recent years.
A financial leverage ratio above 1 indicates that the company relies more on debt financing than equity to fund its operations and growth. A higher ratio can amplify returns on equity when the company is performing well, but it also increases the risk of financial distress if the company faces challenges in meeting its debt obligations.
The trend in the financial leverage ratio of Knowles Corp suggests a strategic shift in the company's capital structure or financial management approach in recent years. Further analysis of the company's debt levels, profitability, and overall financial health would provide additional insights into the implications of these changes in leverage.
Peer comparison
Dec 31, 2023