Ingevity Corp (NGVT)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 2,623,300 | 2,736,500 | 2,469,000 | 2,334,500 | 2,141,700 |
| Total stockholders’ equity | US$ in thousands | 631,400 | 698,300 | 673,800 | 642,100 | 530,800 |
| Financial leverage ratio | 4.15 | 3.92 | 3.66 | 3.64 | 4.03 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $2,623,300K ÷ $631,400K
= 4.15
The financial leverage ratio of Ingevity Corp has shown a fluctuating trend over the past five years. The ratio increased from 3.64 in 2020 to 3.66 in 2021, indicating a slight rise in the company's reliance on debt to finance its operations. However, there was a more significant increase in 2023 where the ratio climbed to 4.15, suggesting a higher level of financial leverage.
It is important to note that a financial leverage ratio above 1 indicates that a company is using more debt than equity in its capital structure. Ingevity Corp's ratios over the past five years have consistently been above 1, which indicates a reliance on debt financing.
The upward trend in the financial leverage ratio could raise concerns about the company's financial risk and ability to meet its debt obligations, especially in times of economic uncertainty or adverse market conditions. Investors and creditors may pay close attention to this ratio as it provides insights into the company's debt management and financial stability.
Peer comparison
Dec 31, 2023