nVent Electric PLC (NVT)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 6,161,700 | 4,902,200 | 4,674,200 | 4,366,100 | 4,640,300 |
| Total stockholders’ equity | US$ in thousands | 3,142,100 | 2,731,700 | 2,496,100 | 2,409,800 | 2,592,500 |
| Financial leverage ratio | 1.96 | 1.79 | 1.87 | 1.81 | 1.79 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $6,161,700K ÷ $3,142,100K
= 1.96
nVent Electric plc's financial leverage ratio has shown a fluctuating trend over the past five years. The ratio increased from 1.79 in 2019 to 1.87 in 2021, before declining slightly to 1.81 in 2020. However, the ratio rose again to 1.79 in 2022 and increased further to 1.96 in 2023.
A financial leverage ratio of 1.96 in 2023 indicates that the company is utilizing more debt to finance its operations compared to its equity. This may suggest increased financial risk as higher leverage means higher interest payments and potential volatility in earnings.
Overall, nVent Electric plc's financial leverage has increased in recent years, and investors and analysts may want to closely monitor the company's ability to manage its debt levels and ensure sustainable growth.
Peer comparison
Dec 31, 2023