Louisiana-Pacific Corporation (LPX)
Financial leverage ratio
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 2,569,000 | 2,437,000 | 2,350,000 | 2,194,000 | 2,086,000 |
| Total stockholders’ equity | US$ in thousands | 1,671,000 | 1,557,000 | 1,433,000 | 1,235,000 | 1,234,000 |
| Financial leverage ratio | 1.54 | 1.57 | 1.64 | 1.78 | 1.69 |
December 31, 2024 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $2,569,000K ÷ $1,671,000K
= 1.54
The financial leverage ratio for Louisiana-Pacific Corporation has shown fluctuations over the years, ranging from 1.54 to 1.78. A higher financial leverage ratio indicates that the company relies more on debt to finance its operations, while a lower ratio suggests a higher proportion of equity in the capital structure.
In this case, the trend shows a slight increase in the financial leverage ratio from 1.69 in 2020 to 1.78 in 2021, followed by a decrease to 1.57 in 2023. This suggests that the company may have increased its debt levels relative to equity in 2021, which was subsequently reduced in 2023.
Overall, a financial leverage ratio of around 1.5 to 1.78 indicates a moderate level of leverage, with the company balancing debt and equity to fund its operations and investments. It is essential for Louisiana-Pacific Corporation to carefully manage its leverage to maintain financial stability and ensure long-term sustainability.
Peer comparison
Dec 31, 2024