Norfolk Southern Corporation (NSC)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 41,652,000 | 38,885,000 | 38,493,000 | 37,962,000 | 37,923,000 |
| Total stockholders’ equity | US$ in thousands | 12,781,000 | 12,733,000 | 13,641,000 | 14,791,000 | 15,184,000 |
| Financial leverage ratio | 3.26 | 3.05 | 2.82 | 2.57 | 2.50 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $41,652,000K ÷ $12,781,000K
= 3.26
The financial leverage ratio of Norfolk Southern Corp. has shown a general increasing trend over the past five years, indicating a rising level of financial leverage. This ratio stood at 3.26 as of December 31, 2023, compared to 3.05 in 2022, 2.82 in 2021, 2.57 in 2020, and 2.50 in 2019.
The higher financial leverage ratio suggests that the company is relying more on debt to finance its operations and investments, which can potentially magnify returns for shareholders during good times but increase financial risk and vulnerability during economic downturns or challenging operating conditions.
It is important for investors and stakeholders to closely monitor this trend in financial leverage to assess the company's ability to meet its debt obligations and manage financial risks effectively. Further analysis of Norfolk Southern Corp.'s profitability, liquidity, and overall financial health is recommended to gain a more comprehensive understanding of its financial position.
Peer comparison
Dec 31, 2023