Lockheed Martin Corporation (LMT)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 52,456,000 | 52,880,000 | 50,873,000 | 50,710,000 | 47,528,000 |
| Total stockholders’ equity | US$ in thousands | 6,835,000 | 9,266,000 | 10,959,000 | 6,015,000 | 3,127,000 |
| Financial leverage ratio | 7.67 | 5.71 | 4.64 | 8.43 | 15.20 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $52,456,000K ÷ $6,835,000K
= 7.67
The financial leverage ratio of Lockheed Martin Corp. has fluctuated over the past five years. The ratio stood at 7.67 in 2023, which represents a substantial increase compared to the previous year's ratio of 5.71 in 2022. This suggests an increase in the company's reliance on debt to finance its assets. The trend continues as the ratio was 4.64 in 2021, then increased to 8.43 in 2020, and even further to 15.20 in 2019. This indicates a significant shift in the company's capital structure, with a higher proportion of debt relative to equity. The increasing trend in the financial leverage ratio warrants a closer examination of the company's debt management and its potential impact on financial risk and stability.