LKQ Corporation (LKQ)
Financial leverage ratio
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 14,955,000 | 15,079,000 | 12,038,000 | 12,606,200 | 12,360,500 |
| Total stockholders’ equity | US$ in thousands | 6,017,000 | 6,167,000 | 5,453,000 | 5,771,740 | 5,655,720 |
| Financial leverage ratio | 2.49 | 2.45 | 2.21 | 2.18 | 2.19 |
December 31, 2024 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $14,955,000K ÷ $6,017,000K
= 2.49
The financial leverage ratio of LKQ Corporation has shown a relatively steady trend over the past five years. Starting at 2.19 in December 2020, the ratio decreased slightly to 2.18 by December 2021 before increasing to 2.21 in December 2022. However, in the following years, there was a notable rise in the ratio, reaching 2.45 by December 2023 and further increasing to 2.49 by December 2024.
The increasing trend in the financial leverage ratio indicates that LKQ Corporation has been relying more on debt financing compared to equity over the years. This could potentially signal a higher level of financial risk as higher leverage ratios imply a greater proportion of debt in the capital structure, leading to increased financial obligations and interest payments.
It is important for stakeholders to closely monitor the trend in the financial leverage ratio to assess the company's ability to meet its debt obligations and manage financial risks effectively. Additional analysis of the company's debt structure, cash flow, and profitability metrics would provide further insights into the overall financial health and sustainability of LKQ Corporation.