MSC Industrial Direct Company Inc (MSM)
Financial leverage ratio
| Mar 2, 2024 | Dec 2, 2023 | Sep 2, 2023 | Jun 3, 2023 | Mar 4, 2023 | Dec 3, 2022 | Sep 3, 2022 | May 28, 2022 | Feb 26, 2022 | Nov 27, 2021 | Aug 28, 2021 | May 29, 2021 | Feb 27, 2021 | Nov 28, 2020 | Aug 29, 2020 | May 30, 2020 | Feb 29, 2020 | Nov 30, 2019 | Aug 31, 2019 | Jun 1, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 2,501,390 | 2,493,720 | 2,544,130 | 2,526,680 | 2,524,460 | 2,749,400 | 2,729,410 | 2,619,320 | 2,564,920 | 2,496,340 | 2,462,120 | 2,424,320 | 2,302,240 | 2,286,650 | 2,382,430 | 2,709,710 | 2,377,030 | 2,339,760 | 2,311,240 | 2,324,350 |
| Total stockholders’ equity | US$ in thousands | 1,390,510 | 1,385,070 | 1,479,160 | 1,489,260 | 1,420,930 | 1,386,340 | 1,350,430 | 1,296,120 | 1,223,970 | 1,182,750 | 1,150,870 | 1,144,650 | 1,112,110 | 1,124,480 | 1,314,940 | 1,294,900 | 1,257,300 | 1,510,860 | 1,478,550 | 1,448,440 |
| Financial leverage ratio | 1.80 | 1.80 | 1.72 | 1.70 | 1.78 | 1.98 | 2.02 | 2.02 | 2.10 | 2.11 | 2.14 | 2.12 | 2.07 | 2.03 | 1.81 | 2.09 | 1.89 | 1.55 | 1.56 | 1.60 |
March 2, 2024 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $2,501,390K ÷ $1,390,510K
= 1.80
The financial leverage ratio of MSC Industrial Direct Company Inc has exhibited fluctuations over the past few quarters, ranging from 1.55 to 2.14. A financial leverage ratio exceeding 1 indicates that the company relies on debt financing in addition to equity to fund its operations and investments.
The company's financial leverage ratio peaked at 2.14 in the third quarter of fiscal year 2022, suggesting a higher level of debt utilization during that period. Subsequently, there was a gradual decline in the ratio before stabilizing around 1.80 in the most recent quarters.
A high financial leverage ratio can enhance returns for shareholders during periods of growth and profitability. However, it also increases financial risk, especially in economic downturns or when operating performance weakens.
Overall, monitoring the financial leverage ratio can provide insights into the capital structure and risk management practices of MSC Industrial Direct Company Inc, offering valuable information for investors and stakeholders assessing the company's financial health and stability.
Peer comparison
Mar 2, 2024