Leggett & Platt Incorporated (LEG)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 4,634,500 | 5,186,100 | 5,307,300 | 4,800,000 | 4,855,400 |
| Total stockholders’ equity | US$ in thousands | 1,333,300 | 1,640,700 | 1,648,000 | 1,424,600 | 1,312,000 |
| Financial leverage ratio | 3.48 | 3.16 | 3.22 | 3.37 | 3.70 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $4,634,500K ÷ $1,333,300K
= 3.48
The financial leverage ratio of Leggett & Platt, Inc. has shown some fluctuations over the past five years. The ratio indicates the extent to which the company is using debt to finance its operations and assets.
We observe an increasing trend in the financial leverage ratio from 2019 to 2020, reaching a peak of 3.67 in 2019. However, following this peak, there has been a declining trend in the ratio in 2020, 2021, and 2022.
In 2023, the financial leverage ratio increased to 3.48, indicating a slight uptick in the company's reliance on debt to support its operations compared to the preceding year. Despite the fluctuation, it is worth noting that the financial leverage ratio has consistently remained above 3, implying that Leggett & Platt, Inc. has been operating with a significant level of debt relative to its equity base in recent years.
It is important for stakeholders to monitor this ratio closely as high levels of financial leverage can indicate increased financial risk and potential difficulties in meeting debt obligations, especially during challenging economic conditions.
Peer comparison
Dec 31, 2023