National Presto Industries Inc (NPK)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 440,536 | 411,847 | 420,398 | 433,170 | 410,253 |
| Total stockholders’ equity | US$ in thousands | 356,256 | 348,052 | 357,623 | 374,348 | 367,957 |
| Financial leverage ratio | 1.24 | 1.18 | 1.18 | 1.16 | 1.11 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $440,536K ÷ $356,256K
= 1.24
The financial leverage ratio of National Presto Industries Inc has been gradually increasing over the past five years, from 1.11 in 2019 to 1.24 in 2023. This indicates that the company has been relying more on debt to finance its operations and growth. A ratio above 1 implies that the company has more debt than equity in its capital structure.
The increasing trend in the financial leverage ratio suggests that National Presto Industries Inc may be taking on more financial risk by leveraging its operations with debt. While increased leverage can potentially amplify returns for shareholders during good economic conditions, it also poses a higher risk of financial distress during economic downturns or periods of high interest rates.
Investors and stakeholders should closely monitor the company's ability to service its debt obligations and manage its leverage levels effectively to ensure the long-term sustainability and profitability of National Presto Industries Inc.
Peer comparison
Dec 31, 2023