MasTec Inc (MTZ)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 9,373,510 | 9,293,260 | 7,121,400 | 5,227,900 | 4,997,000 |
| Total stockholders’ equity | US$ in thousands | 2,706,150 | 2,737,330 | 2,539,810 | 2,001,920 | 1,787,220 |
| Financial leverage ratio | 3.46 | 3.40 | 2.80 | 2.61 | 2.80 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $9,373,510K ÷ $2,706,150K
= 3.46
The financial leverage ratio of MasTec Inc has shown an increasing trend from 2.80 in 2019 to 3.46 in 2023. This indicates that the company's reliance on debt to finance its operations and growth has been consistently rising over the past five years. The ratio of 3.46 in 2023 suggests that for every dollar of equity, the company has $3.46 of debt.
A higher financial leverage ratio can indicate higher financial risk, as the company is more leveraged and has a significant debt burden to service. It also implies that the company has been utilizing debt to fuel its growth, which can potentially lead to increased profitability but also greater vulnerability in times of economic downturns or rising interest rates.
Investors and stakeholders should closely monitor MasTec Inc's financial leverage ratio to assess the company's ability to manage its debt levels effectively and generate sufficient returns to cover its financial obligations. Additionally, they should consider the company's overall financial health and its ability to sustain its operations and growth in the long term.
Peer comparison
Dec 31, 2023