Linde plc Ordinary Shares (LIN)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 80,811,000 | 79,658,000 | 81,605,000 | 88,229,000 | 86,612,000 |
| Total stockholders’ equity | US$ in thousands | 39,720,000 | 40,028,000 | 44,035,000 | 47,317,000 | 49,074,000 |
| Financial leverage ratio | 2.03 | 1.99 | 1.85 | 1.86 | 1.76 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $80,811,000K ÷ $39,720,000K
= 2.03
The financial leverage ratio of Linde Plc. has been relatively stable over the past five years, ranging from 1.76 in 2019 to 2.03 in 2023. This ratio indicates the extent to which the company relies on debt financing to support its operations and growth.
A financial leverage ratio above 1 suggests that the company has more debt than equity in its capital structure. In Linde Plc.'s case, the ratio has consistently been above 1, indicating a higher reliance on debt financing compared to equity.
The slight increase in the financial leverage ratio from 2019 to 2023 suggests that the company has been taking on more debt relative to its equity over the years. This could be a strategic decision to benefit from the tax advantages of debt or to capitalize on opportunities for growth that require additional funding.
It is essential for investors and stakeholders to monitor the financial leverage ratio of Linde Plc. to assess the company's risk exposure and ability to meet its financial obligations, as higher leverage levels can amplify the impact of economic downturns or interest rate fluctuations on the company's financial health.
Peer comparison
Dec 31, 2023