MillerKnoll Inc (MLKN)
Financial leverage ratio
| Jun 3, 2023 | May 28, 2022 | May 29, 2021 | May 30, 2020 | Jun 1, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 4,274,800 | 4,514,000 | 2,076,800 | 2,053,900 | 1,569,300 |
| Total stockholders’ equity | US$ in thousands | 1,432,600 | 1,427,100 | 860,500 | 652,400 | 719,200 |
| Financial leverage ratio | 2.98 | 3.16 | 2.41 | 3.15 | 2.18 |
June 3, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $4,274,800K ÷ $1,432,600K
= 2.98
The financial leverage ratio, also known as the debt-to-equity ratio, measures the extent to which a company is using debt to finance its operations. A higher ratio indicates that more of the company's assets are financed through debt, which can potentially amplify returns but also increase financial risk.
Analyzing the historical trend of MillerKnoll Inc's financial leverage ratio reveals fluctuations over the past five years. In June 2023, the financial leverage ratio stood at 2.98, showing a decrease from the previous year's 3.16. This reduction suggests a lower reliance on debt to finance the company's assets compared to the prior period.
Comparing the ratio in 2023 to the data from 2021 and 2019, it is evident that the company's financial leverage ratio has displayed significant variability. The highest ratio was noted in 2020 at 3.19, indicating a larger proportion of debt in the capital structure, while the lowest ratio of 2.18 was observed in 2019, signifying a comparatively lower level of debt financing.
Overall, based on the financial leverage ratio data, it is apparent that MillerKnoll Inc has experienced fluctuations in its reliance on debt to fund its operations over the past five years. This suggests the company has adjusted its capital structure, potentially impacting its risk profile and financial flexibility. Additional complementary financial metrics and qualitative analysis would be required to gain a comprehensive understanding of the company's capital structure and its implications.