MSC Industrial Direct Company Inc (MSM)
Financial leverage ratio
| Aug 31, 2024 | Sep 2, 2023 | Sep 3, 2022 | Aug 28, 2021 | Aug 29, 2020 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 2,462,310 | 2,544,130 | 2,729,410 | 2,462,120 | 2,382,430 |
| Total stockholders’ equity | US$ in thousands | 1,391,800 | 1,479,160 | 1,350,430 | 1,150,870 | 1,314,940 |
| Financial leverage ratio | 1.77 | 1.72 | 2.02 | 2.14 | 1.81 |
August 31, 2024 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $2,462,310K ÷ $1,391,800K
= 1.77
The financial leverage ratio of MSC Industrial Direct Company Inc has fluctuated over the past five years, ranging from 1.72 to 2.14. The ratio reached its peak in September 2022 at 2.02 and then decreased to 1.77 by August 2024. This indicates that the company has been utilizing more debt in its capital structure in some years compared to others. A higher financial leverage ratio suggests that a company is relying more on debt to finance its operations, which can amplify returns but also increase financial risk. Conversely, a lower ratio indicates a lower reliance on debt, which can provide more stability but may limit potential returns. Overall, monitoring the trend of the financial leverage ratio can provide insights into the company's capital structure decisions and financial risk management strategies.
Peer comparison
Aug 31, 2024