Matthews International Corporation (MATW)
Financial leverage ratio
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 1,834,890 | 1,887,380 | 1,882,770 | 2,032,080 | 2,072,630 |
| Total stockholders’ equity | US$ in thousands | 437,158 | 525,668 | 487,352 | 636,548 | 610,807 |
| Financial leverage ratio | 4.20 | 3.59 | 3.86 | 3.19 | 3.39 |
September 30, 2024 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $1,834,890K ÷ $437,158K
= 4.20
The financial leverage ratio of Matthews International Corporation has fluctuated over the past five years, with the ratio ranging from 3.19 to 4.20. A higher financial leverage ratio indicates that the company relies more on debt financing to fund its operations and investments, which can amplify returns but also increase financial risk.
In 2024, the financial leverage ratio increased to 4.20, indicating a higher level of leverage compared to the previous year. This suggests that the company has taken on more debt relative to its equity, potentially to finance growth opportunities or acquisitions. It is important to note that higher leverage can magnify both positive and negative effects on the company's financial performance.
In 2023, the financial leverage ratio decreased to 3.59, reflecting a decrease in the company's reliance on debt financing compared to the prior year. This may indicate a more conservative financial strategy or a shift towards using internal sources of funds to support operations.
Overall, fluctuations in the financial leverage ratio of Matthews International Corporation demonstrate varying levels of leverage and financial risk over the years, highlighting the importance of monitoring the company's capital structure and debt management practices.