MGP Ingredients Inc (MGPI)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 1,392,350 | 1,158,210 | 1,041,470 | 366,575 | 322,597 |
| Total stockholders’ equity | US$ in thousands | 850,492 | 746,724 | 644,755 | 262,526 | 231,044 |
| Financial leverage ratio | 1.64 | 1.55 | 1.62 | 1.40 | 1.40 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $1,392,350K ÷ $850,492K
= 1.64
The financial leverage ratio of MGP Ingredients, Inc. has fluctuated over the past five years, indicating varying levels of debt utilization relative to equity during this period. In 2023, the financial leverage ratio increased to 1.64 from 1.55 in 2022, suggesting a higher level of debt financing compared to equity. This increase may indicate a greater reliance on debt to fund operations or growth initiatives in the most recent year.
Comparing the financial leverage ratio in 2023 to previous years, the ratio is higher than the levels seen in 2021 (1.62) and 2020 (1.40) but on par with the ratio in 2019 (1.40). This indicates that in 2023, the company had a relatively higher proportion of debt in its capital structure compared to equity than in the two previous years.
The trend in the financial leverage ratio could be a reflection of MGP Ingredients, Inc.'s strategic decisions regarding capital structure, risk management, and growth plans during the respective periods. It is essential for stakeholders to monitor the financial leverage ratio over time to assess the company's ability to manage its debt levels effectively and sustainably in the long term.