nVent Electric PLC (NVT)
Financial leverage ratio
| Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 6,918,000 | 6,188,100 | 6,169,700 | 6,161,700 | 5,925,700 | 5,922,100 | 4,916,400 | 4,902,200 | 4,875,900 | 4,765,600 | 4,703,600 | 4,674,200 | 4,678,900 | 4,709,800 | 4,398,000 | 4,366,100 | 4,410,600 | 4,712,400 | 4,730,200 | 4,640,300 |
| Total stockholders’ equity | US$ in thousands | 3,283,700 | 3,287,800 | 3,212,300 | 3,142,100 | 2,945,100 | 2,875,700 | 2,789,900 | 2,731,700 | 2,650,600 | 2,586,000 | 2,533,900 | 2,496,100 | 2,541,600 | 2,492,800 | 2,450,000 | 2,409,800 | 2,413,400 | 2,578,200 | 2,576,600 | 2,592,500 |
| Financial leverage ratio | 2.11 | 1.88 | 1.92 | 1.96 | 2.01 | 2.06 | 1.76 | 1.79 | 1.84 | 1.84 | 1.86 | 1.87 | 1.84 | 1.89 | 1.80 | 1.81 | 1.83 | 1.83 | 1.84 | 1.79 |
September 30, 2024 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $6,918,000K ÷ $3,283,700K
= 2.11
nVent Electric PLC's financial leverage ratio has shown some fluctuations over the past two years. The financial leverage ratio measures the extent to which the company relies on debt financing compared to its equity. A higher financial leverage ratio indicates a higher level of debt relative to equity in the company's capital structure.
Analyzing the trend in nVent Electric PLC's financial leverage ratio, we can see that it has generally been within the range of 1.76 to 2.11 over the past eight quarters. The ratio increased from 1.79 in December 2019 to 2.01 in September 2023, before declining to 1.88 in June 2024. This suggests that the company has been utilizing more debt relative to equity to fund its operations in recent quarters.
It is important to note that a high financial leverage ratio can indicate increased financial risk for the company, as higher debt levels can lead to higher interest expenses and debt repayment obligations, especially during challenging economic conditions. Conversely, a low financial leverage ratio may signal a conservative approach to financing, but it could also imply missed opportunities for potential growth through leverage.
Overall, nVent Electric PLC's financial leverage ratio trend indicates a varying level of debt dependency over the analyzed period, suggesting potential shifts in the company's financing strategy and risk profile. Further analysis of the company's overall financial health, profitability, and cash flow generation would provide a more comprehensive understanding of its financial position.
Peer comparison
Sep 30, 2024