Kontoor Brands Inc (KTB)

Financial leverage ratio

		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	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019
Total assets	US$ in thousands	1,645,440	1,625,930	1,608,320	1,643,570	1,582,260	1,653,010	1,543,150	1,589,050	1,533,020	1,613,180	1,517,840	1,519,680	1,545,820	1,668,720	1,572,770	1,901,800	1,517,160	1,585,760	1,588,200
Total stockholders’ equity	US$ in thousands	371,913	347,624	323,251	299,288	250,757	208,099	179,189	184,090	148,138	184,754	153,886	134,264	84,641	26,028	-44,889	-18,485	69,257	55,571	82,168
Financial leverage ratio		4.42	4.68	4.98	5.49	6.31	7.94	8.61	8.63	10.35	8.73	9.86	11.32	18.26	64.11	—	—	21.91	28.54	19.33

December 31, 2023 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $1,645,440K ÷ $371,913K
= 4.42

The financial leverage ratio of Kontoor Brands Inc has exhibited fluctuations over the past few quarters. The trend shows an increasing level of leverage, with the ratio ranging from 4.42 in Dec 2023 to 64.11 in Sep 2020. This indicates that the company has been relying more on debt to finance its operations and growth.

The significant spike in the financial leverage ratio in Dec 2020 and Sep 2020, reaching exceptionally high levels of 18.26 and 64.11, respectively, might raise concerns about the company's ability to manage its debt levels effectively.

Although the financial leverage ratio has decreased in recent quarters, it remains relatively high, signaling that Kontoor Brands Inc still has a significant amount of debt in its capital structure compared to its equity.

Investors and stakeholders should closely monitor the trend of the financial leverage ratio to assess the company's risk exposure and financial stability, as high leverage can increase financial risks during economic downturns or challenging market conditions.