Laboratory Corporation of America Holdings (LH)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 16,725,100 | 20,155,100 | 20,385,400 | 20,071,700 | 18,046,400 |
| Total stockholders’ equity | US$ in thousands | 7,875,000 | 10,096,600 | 10,273,400 | 9,436,600 | 7,643,900 |
| Financial leverage ratio | 2.12 | 2.00 | 1.98 | 2.13 | 2.36 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $16,725,100K ÷ $7,875,000K
= 2.12
The financial leverage ratio of Laboratory Corp. Of America Holdings has exhibited fluctuations over the past five years. The ratio increased from 2.00 in 2019 to 2.14 in 2020, indicating a higher level of financial leverage in 2020. However, in 2021, the ratio decreased to 1.98, showing a reduction in financial leverage. The trend reversed again in 2022, with the ratio increasing to 2.00. Subsequently, in 2023, the ratio increased further to 2.12.
These fluctuations suggest that Laboratory Corp. Of America Holdings has been actively managing its capital structure and levels of debt over the years. A higher financial leverage ratio implies a higher proportion of debt in the company's capital structure, which can amplify returns but also increase financial risk. Conversely, a lower ratio indicates a reduced reliance on debt financing, potentially signaling a more conservative financial strategy.
Overall, the company's financial leverage ratio has shown variability, reflecting changes in its debt levels and capital structure management over the years. Further analysis of the company's financial statements and business strategy would help in understanding the factors driving these changes in the financial leverage ratio.
Peer comparison
Dec 31, 2023