M/I Homes Inc (MHO)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 4,022,440 | 3,714,920 | 3,239,850 | 2,643,040 | 2,105,590 |
| Total stockholders’ equity | US$ in thousands | 2,516,940 | 2,070,720 | 1,624,180 | 1,258,700 | 1,003,480 |
| Financial leverage ratio | 1.60 | 1.79 | 1.99 | 2.10 | 2.10 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $4,022,440K ÷ $2,516,940K
= 1.60
The financial leverage ratio of MI Homes Inc. has been gradually decreasing over the past five years, indicating a trend towards lower leverage in the company's capital structure. In 2019 and 2020, the ratio was constant at 2.10, suggesting a stable level of leverage during those years.
However, starting from 2021, there has been a consistent decline in the financial leverage ratio, with the ratio decreasing to 1.99 in 2021, 1.79 in 2022, and further down to 1.60 in 2023. This downward trend in the financial leverage ratio may indicate that MI Homes Inc. has been reducing its reliance on debt to finance its operations and growth.
A decreasing financial leverage ratio can be viewed positively as it suggests a lower level of financial risk for the company, as less debt means lower interest payments and potential for financial distress. However, it could also indicate a more conservative approach to financing, potentially limiting the company's growth opportunities compared to peers with higher leverage ratios.
Overall, the declining trend in MI Homes Inc.'s financial leverage ratio should be closely monitored to assess the impact on the company's financial structure and growth prospects in the future.
Peer comparison
Dec 31, 2023