Louisiana-Pacific Corporation (LPX)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 2,437,000 | 2,350,000 | 2,194,000 | 2,086,000 | 1,835,000 |
| Total stockholders’ equity | US$ in thousands | 1,557,000 | 1,433,000 | 1,235,000 | 1,234,000 | 991,000 |
| Financial leverage ratio | 1.57 | 1.64 | 1.78 | 1.69 | 1.85 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $2,437,000K ÷ $1,557,000K
= 1.57
The financial leverage ratio for Louisiana-Pacific Corp. has shown a decreasing trend over the past five years. As of December 31, 2023, the financial leverage ratio stood at 1.57, which indicates that the company's level of financial leverage has reduced compared to the previous year.
A financial leverage ratio of 1.57 suggests that for every dollar of equity, the company has $1.57 of total assets. This signifies that the company relies more on equity financing rather than debt financing, which can be viewed positively as it lowers the financial risk associated with high leverage levels.
The decreasing trend in the financial leverage ratio from 1.85 in 2019 to 1.57 in 2023 indicates that Louisiana-Pacific Corp. has been effectively managing its debt levels and capital structure over the years. A lower financial leverage ratio generally indicates that the company has a stronger financial position and may be perceived as less risky by investors and creditors.
Overall, the decreasing financial leverage ratio of Louisiana-Pacific Corp. reflects a prudent approach to managing its capital structure and indicates a favorable financial position for the company.
Peer comparison
Dec 31, 2023