L3Harris Technologies Inc (LHX)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Jun 30, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 41,687,000 | 33,524,000 | 34,709,000 | 36,960,000 | 10,117,000 |
| Total stockholders’ equity | US$ in thousands | 18,765,000 | 18,523,000 | 19,213,000 | 20,724,000 | 3,363,000 |
| Financial leverage ratio | 2.22 | 1.81 | 1.81 | 1.78 | 3.01 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $41,687,000K ÷ $18,765,000K
= 2.22
The financial leverage ratio of L3Harris Technologies Inc has shown some variability over the past five years. The ratio increased from 1.78 in 2020 to 1.81 in 2021 and remained stable at that level in 2022. However, there was a notable increase to 2.22 in 2023, indicating a higher level of financial leverage compared to the previous years.
This rise in the financial leverage ratio suggests that L3Harris Technologies Inc has been relying more on debt to finance its operations and growth. While using debt can provide leverage and potentially boost returns, it also increases the company's financial risk, especially in times of economic uncertainty or fluctuating interest rates.
It would be crucial for investors and stakeholders to closely monitor the trend in the financial leverage ratio and assess the company's ability to manage its debt levels effectively to ensure sustainable financial health and performance in the long term.
Peer comparison
Dec 31, 2023