McCormick & Company Incorporated (MKC)
Financial leverage ratio
| Feb 29, 2024 | Nov 30, 2023 | Aug 31, 2023 | May 31, 2023 | Feb 28, 2023 | Nov 30, 2022 | Aug 31, 2022 | May 31, 2022 | Feb 28, 2022 | Nov 30, 2021 | Aug 31, 2021 | May 31, 2021 | Feb 28, 2021 | Nov 30, 2020 | Aug 31, 2020 | May 31, 2020 | Feb 29, 2020 | Nov 30, 2019 | Aug 31, 2019 | May 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 12,890,100 | 12,862,300 | 12,990,100 | 12,908,200 | 13,205,400 | 13,124,900 | 12,941,000 | 12,957,900 | 12,940,800 | 12,905,800 | 12,884,400 | 12,810,500 | 12,685,100 | 12,089,700 | 10,860,700 | 10,576,100 | 10,491,700 | 10,362,100 | 10,366,000 | 10,236,700 |
| Total stockholders’ equity | US$ in thousands | 5,232,500 | 5,060,700 | 5,049,300 | 4,937,000 | 4,870,100 | 4,680,500 | 4,589,300 | 4,598,200 | 4,597,700 | 4,411,000 | 4,386,500 | 4,325,300 | 4,149,500 | 3,926,100 | 3,932,700 | 3,649,900 | 3,561,900 | 3,444,200 | 3,468,700 | 3,370,900 |
| Financial leverage ratio | 2.46 | 2.54 | 2.57 | 2.61 | 2.71 | 2.80 | 2.82 | 2.82 | 2.81 | 2.93 | 2.94 | 2.96 | 3.06 | 3.08 | 2.76 | 2.90 | 2.95 | 3.01 | 2.99 | 3.04 |
February 29, 2024 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $12,890,100K ÷ $5,232,500K
= 2.46
The financial leverage ratio of McCormick & Company Incorporated has shown fluctuations over the last few quarters. The ratio has generally been increasing, indicating an increasing level of financial leverage. This means that the company has been relying more on debt to finance its operations and investments.
The ratio peaked at 3.08 in November 2020 but has since slightly decreased to 2.46 in February 2024. However, it is important to note that the ratio remains above 2.0 consistently, which suggests that the company's level of debt relative to its equity is relatively high.
A high financial leverage ratio can indicate increased financial risk as the company may struggle to meet debt obligations in adverse economic conditions. Investors and creditors may scrutinize this trend closely to assess the company's ability to manage its debt levels effectively and maintain financial stability. Additionally, a high leverage ratio can impact the company's creditworthiness and cost of borrowing in the future.