Quanex Building Products (NX)
Financial leverage ratio
| Oct 31, 2024 | Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 2,319,790 | 831,143 | 724,617 | 717,323 | 691,585 |
| Total stockholders’ equity | US$ in thousands | 1,010,750 | 545,554 | 464,835 | 419,782 | 355,759 |
| Financial leverage ratio | 2.30 | 1.52 | 1.56 | 1.71 | 1.94 |
October 31, 2024 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $2,319,790K ÷ $1,010,750K
= 2.30
The financial leverage ratio of Quanex Building Products has shown a fluctuating trend over the past five years. The ratio stood at 2.30 as of October 31, 2024, indicating that the company's level of financial leverage has increased significantly compared to the previous year. This suggests that Quanex has taken on more debt relative to its equity, which may pose higher financial risk.
In comparison to the ratios of the previous years, where it was 1.52 in 2023, 1.56 in 2022, 1.71 in 2021, and 1.94 in 2020, the current ratio of 2.30 stands out as relatively high. This increase in financial leverage could be driven by various factors such as increased borrowing for expansion, acquisitions, or other strategic initiatives.
It is important for investors and stakeholders to closely monitor Quanex Building Products' financial leverage ratio, as a high ratio could signal increased financial risk and potential challenges in meeting debt obligations. Additionally, it is crucial for the company to carefully manage its debt levels to maintain a healthy balance between debt and equity financing.
Peer comparison
Oct 31, 2024