Quanex Building Products (NX)
Financial leverage ratio
| Jan 31, 2024 | Oct 31, 2023 | Jul 31, 2023 | Apr 30, 2023 | Jan 31, 2023 | Oct 31, 2022 | Jul 31, 2022 | Apr 30, 2022 | Jan 31, 2022 | Oct 31, 2021 | Jul 31, 2021 | Apr 30, 2021 | Jan 31, 2021 | Oct 31, 2020 | Jul 31, 2020 | Apr 30, 2020 | Jan 31, 2020 | Oct 31, 2019 | Jul 31, 2019 | Apr 30, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 813,420 | 831,143 | 847,809 | 822,112 | 827,026 | 724,617 | 743,607 | 740,490 | 718,272 | 717,323 | 719,192 | 715,572 | 694,271 | 691,585 | 686,791 | 712,885 | 667,200 | 645,110 | 680,064 | 707,042 |
| Total stockholders’ equity | US$ in thousands | 555,029 | 545,554 | 525,955 | 492,727 | 475,688 | 464,835 | 450,137 | 436,174 | 424,499 | 419,782 | 405,389 | 395,097 | 377,708 | 355,759 | 339,938 | 323,957 | 329,933 | 330,187 | 361,350 | 360,888 |
| Financial leverage ratio | 1.47 | 1.52 | 1.61 | 1.67 | 1.74 | 1.56 | 1.65 | 1.70 | 1.69 | 1.71 | 1.77 | 1.81 | 1.84 | 1.94 | 2.02 | 2.20 | 2.02 | 1.95 | 1.88 | 1.96 |
January 31, 2024 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $813,420K ÷ $555,029K
= 1.47
The financial leverage ratio of Quanex Building Products has been showing a gradually increasing trend over the past few quarters, indicating a higher level of financial leverage. The ratio was 1.47 as of January 31, 2024, and has been steadily increasing since then.
A financial leverage ratio above 1 indicates that the company relies more on debt to finance its operations rather than equity. Quanex Building Products' ratio has surpassed 2 in some quarters, indicating a higher level of debt in its capital structure.
A high financial leverage ratio can amplify returns on equity when the business is performing well, but it also exposes the company to higher financial risk, especially during economic downturns or periods of low profitability. It is important for the company to balance its use of debt to ensure it can meet its financial obligations and maintain financial health in the long term.
Peer comparison
Jan 31, 2024