O-I Glass Inc (OI)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 9,669,000 | 9,061,000 | 8,832,000 | 8,882,000 | 9,610,000 |
| Total stockholders’ equity | US$ in thousands | 1,609,000 | 1,417,000 | 720,000 | 297,000 | 467,000 |
| Financial leverage ratio | 6.01 | 6.39 | 12.27 | 29.91 | 20.58 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $9,669,000K ÷ $1,609,000K
= 6.01
The financial leverage ratio of O-I Glass Inc has been fluctuating over the past five years, ranging from 6.01 in 2023 to 29.91 in 2020. The ratio indicates the company's reliance on debt to finance its operations and growth. A higher financial leverage ratio implies a higher level of debt compared to equity in the company's capital structure, which can magnify returns but also increase financial risk.
The significant decrease in the financial leverage ratio from 29.91 in 2020 to 6.01 in 2023 suggests a reduction in the company's debt levels relative to equity, possibly due to debt repayment or equity issuance. This may indicate a more conservative approach to capital structure and a lower risk of financial distress.
Overall, O-I Glass Inc's financial leverage ratio demonstrates a varying trend over the years, reflecting changes in the company's debt management strategy and financial health. It is essential for investors and stakeholders to monitor this ratio to assess the company's leverage and risk profile.