Lincoln Electric Holdings Inc (LECO)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 3,377,300 | 3,180,550 | 2,592,310 | 2,314,450 | 2,371,210 |
| Total stockholders’ equity | US$ in thousands | 1,308,850 | 1,034,040 | 863,909 | 789,271 | 818,172 |
| Financial leverage ratio | 2.58 | 3.08 | 3.00 | 2.93 | 2.90 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $3,377,300K ÷ $1,308,850K
= 2.58
The financial leverage ratio measures the extent to which a company relies on debt to finance its operations and growth. For Lincoln Electric Holdings, Inc., the trend of the financial leverage ratio over the last five years shows a fluctuating pattern. The ratio decreased from 2.90 in 2019 to 2.58 in 2023, with variations in between.
A financial leverage ratio of 2.58 in 2023 indicates that for every dollar of equity, the company has $2.58 of debt. This suggests that Lincoln Electric Holdings, Inc. has reduced its reliance on debt financing in 2023 compared to previous years. Lower leverage ratios can indicate a stronger financial position and less risk of financial distress.
Overall, based on the trend observed, Lincoln Electric Holdings, Inc. has shown some level of prudence in managing its leverage over the years, with a lower ratio in 2023 indicating improved financial health in terms of debt utilization.
Peer comparison
Dec 31, 2023