LKQ Corporation (LKQ)
Financial leverage ratio
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 15,079,000 | 15,168,000 | 14,155,000 | 12,508,000 | 12,038,000 | 11,666,000 | 12,134,000 | 12,778,000 | 12,606,000 | 12,460,900 | 12,438,100 | 12,665,500 | 12,360,500 | 12,161,200 | 12,035,300 | 12,354,100 | 12,780,000 | 12,411,700 | 12,704,200 | 12,665,900 |
| Total stockholders’ equity | US$ in thousands | 6,167,000 | 5,958,000 | 5,953,000 | 5,691,000 | 5,453,000 | 5,262,000 | 5,590,000 | 5,784,000 | 5,772,000 | 5,901,810 | 5,877,920 | 5,842,630 | 5,655,720 | 5,388,190 | 5,118,510 | 4,957,840 | 5,008,880 | 4,817,770 | 4,840,490 | 4,799,480 |
| Financial leverage ratio | 2.45 | 2.55 | 2.38 | 2.20 | 2.21 | 2.22 | 2.17 | 2.21 | 2.18 | 2.11 | 2.12 | 2.17 | 2.19 | 2.26 | 2.35 | 2.49 | 2.55 | 2.58 | 2.62 | 2.64 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $15,079,000K ÷ $6,167,000K
= 2.45
The financial leverage ratio of LKQ Corp has been fluctuating over the past eight quarters. The ratio measures the company's use of debt to finance its operations and indicates the proportion of a company's assets that are financed by debt relative to equity.
From Q1 2022 to Q3 2023, the financial leverage ratio has ranged from 2.17 to 2.55, with the highest ratio recorded in Q3 2023 and the lowest in Q2 2022. This indicates that the company has been relying more on debt to finance its assets in recent quarters compared to earlier periods.
A ratio above 1 suggests that the company is using more debt than equity to finance its operations. In this case, with ratios consistently above 2, LKQ Corp is significantly leveraged, implying a higher level of financial risk. It is important for investors and stakeholders to closely monitor the trend in the financial leverage ratio to assess the company's ability to meet its financial obligations and manage its debt effectively.