Murphy USA Inc (MUSA)

Financial leverage ratio

		Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Total assets	US$ in thousands	4,340,100	4,305,300	4,204,800	4,119,200	4,123,200	4,135,100	4,217,800	4,206,200	4,048,200	4,094,300	3,986,100	3,980,600	2,685,700	2,788,200	2,860,700	2,583,400	2,687,200	2,616,700	2,571,300	2,504,400
Total stockholders’ equity	US$ in thousands	828,900	844,100	750,800	716,800	640,700	766,000	762,700	791,500	807,200	824,800	757,900	780,600	784,100	895,700	918,000	746,800	803,000	779,000	816,300	797,800
Financial leverage ratio		5.24	5.10	5.60	5.75	6.44	5.40	5.53	5.31	5.02	4.96	5.26	5.10	3.43	3.11	3.12	3.46	3.35	3.36	3.15	3.14

December 31, 2023 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $4,340,100K ÷ $828,900K
= 5.24

The financial leverage ratio of Murphy USA Inc has shown some variability over the last eight quarters, ranging from a low of 5.10 in Q3 2023 to a high of 6.44 in Q4 2022. The trend indicates that the company's reliance on debt to finance its operations has fluctuated over time.

A higher financial leverage ratio indicates that a company has a higher proportion of debt in its capital structure compared to equity, which may increase financial risk due to the firm's obligation to pay interest and principal on the debt. Conversely, a lower ratio suggests a lower financial risk but may also reflect limited use of debt financing that could potentially limit growth opportunities.

Murphy USA Inc's recent decrease in the financial leverage ratio from 6.44 in Q4 2022 to 5.10 in Q3 2023 may suggest a shift towards a more conservative capital structure. However, the ratio increased to 5.60 in Q2 2023 before declining again in Q3 2023, indicating some fluctuation in the company's debt levels.

Overall, monitoring the financial leverage ratio along with other financial metrics is essential to assess the company's capital structure efficiency and financial risk management. A consistent and balanced approach to debt and equity financing is crucial for sustaining long-term growth and profitability.