nVent Electric PLC (NVT)
Financial leverage ratio
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 6,734,900 | 6,161,700 | 4,902,200 | 4,674,200 | 4,366,100 |
| Total stockholders’ equity | US$ in thousands | 3,237,600 | 3,142,100 | 2,731,700 | 2,496,100 | 2,409,800 |
| Financial leverage ratio | 2.08 | 1.96 | 1.79 | 1.87 | 1.81 |
December 31, 2024 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $6,734,900K ÷ $3,237,600K
= 2.08
The financial leverage ratio of nVent Electric PLC has shown a fluctuating trend over the past five years.
- In December 31, 2020, the financial leverage ratio was 1.81, indicating that the company's debt level was 1.81 times its equity.
- By December 31, 2021, the ratio slightly increased to 1.87, suggesting a slight increase in the reliance on debt to finance its operations or investments.
- In December 31, 2022, the ratio decreased to 1.79, indicating a reduction in the debt-to-equity ratio compared to the previous year.
- However, in the subsequent years, the financial leverage ratio increased significantly. By December 31, 2023, it reached 1.96, and by December 31, 2024, it further increased to 2.08, indicating a substantial increase in the company's debt relative to its equity.
Overall, the trend in the financial leverage ratio suggests that nVent Electric PLC has experienced fluctuations in its debt structure over the years, with a noticeable increase in leverage in the latter years of the analysis period. This may imply a shift towards a more aggressive debt financing strategy or increasing financial risk for the company.
Peer comparison
Dec 31, 2024