Enviri Corporation (NVRI)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 2,854,550 | 2,790,850 | 3,053,910 | 2,993,290 | 2,367,470 |
| Total stockholders’ equity | US$ in thousands | 523,151 | 569,442 | 748,160 | 657,154 | 741,580 |
| Financial leverage ratio | 5.46 | 4.90 | 4.08 | 4.55 | 3.19 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $2,854,550K ÷ $523,151K
= 5.46
The financial leverage ratio of Enviri Corp has been showing an increasing trend over the past five years. The ratio was 3.19 in 2019, increased to 4.55 in 2020, and continued to rise to 4.08 in 2021, 4.90 in 2022, and finally reaching 5.46 in 2023. This indicates that the company has been relying more on debt to finance its operations and growth over the years. A higher financial leverage ratio suggests that a larger portion of the company's assets is funded by debt rather than equity. While this can amplify returns in good times, it also exposes the company to increased risk during economic downturns or unfavorable business conditions, as higher debt levels can lead to financial distress. It would be prudent for Enviri Corp to carefully manage its debt levels and ensure that it can service its debt obligations effectively in the long run.