Littelfuse Inc (LFUS)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 3,995,280 | 3,903,730 | 3,151,700 | 2,747,590 | 2,559,900 |
| Total stockholders’ equity | US$ in thousands | 2,480,170 | 2,211,190 | 1,893,390 | 1,608,640 | 1,495,880 |
| Financial leverage ratio | 1.61 | 1.77 | 1.66 | 1.71 | 1.71 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $3,995,280K ÷ $2,480,170K
= 1.61
The financial leverage ratio measures the extent to which a company relies on debt to finance its operations, with a higher ratio indicating higher financial leverage or greater reliance on debt.
Littelfuse Inc's financial leverage ratio has fluctuated over the past five years, ranging from 1.61 to 1.77. A decreasing trend in the ratio from 1.77 in 2022 to 1.61 in 2023 suggests a reduction in the company's reliance on debt to fund its operations. This decrease in financial leverage may indicate a more conservative approach to capital structure management or a decrease in the proportion of debt in the company's capital structure.
However, it's important to note that a financial leverage ratio of around 1.61 still indicates that Littelfuse Inc employs a moderate level of debt in its capital structure, indicating some level of financial risk associated with the company's operations. It would be essential for stakeholders to monitor this ratio along with other financial metrics to assess the company's overall financial health and risk profile.
Peer comparison
Dec 31, 2023