Mohawk Industries Inc (MHK)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 13,559,900 | 14,120,400 | 14,224,500 | 14,327,800 | 13,386,700 |
| Total stockholders’ equity | US$ in thousands | 7,623,070 | 8,011,510 | 8,421,420 | 8,534,320 | 8,119,840 |
| Financial leverage ratio | 1.78 | 1.76 | 1.69 | 1.68 | 1.65 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $13,559,900K ÷ $7,623,070K
= 1.78
The financial leverage ratio of Mohawk Industries, Inc. has shown a gradual increase from 1.65 in 2019 to 1.78 in 2023. This indicates that the company has been relying more on debt financing over the years to support its operations and growth. While an increase in the financial leverage ratio can amplify returns on equity when the company is performing well, it also exposes the business to higher financial risk, especially in times of economic uncertainty or high-interest rates. It is essential for investors and stakeholders to monitor this trend closely to assess the company's ability to meet its debt obligations and manage potential risks associated with its leverage levels.
Peer comparison
Dec 31, 2023