Olin Corporation (OLN)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 7,713,200 | 8,044,200 | 8,517,700 | 8,270,900 | 9,187,800 |
| Total stockholders’ equity | US$ in thousands | 2,232,400 | 2,543,600 | 2,652,200 | 1,450,800 | 2,417,500 |
| Financial leverage ratio | 3.46 | 3.16 | 3.21 | 5.70 | 3.80 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $7,713,200K ÷ $2,232,400K
= 3.46
The financial leverage ratio of Olin Corp. has shown fluctuation over the past five years. The ratio increased from 3.80 in 2019 to 5.70 in 2020, indicating a significant spike in financial leverage during that year. Subsequently, the ratio decreased to 3.21 in 2021, before rising again to 3.16 in 2022 and further to 3.46 in 2023.
It is important to note that a higher financial leverage ratio generally signifies that a company is using more debt to finance its operations, which can amplify both returns and risks for the shareholders. The substantial increase in the ratio in 2020 may indicate a strategic decision by Olin Corp. to take on additional debt to fund expansion or other activities during that period. The subsequent decline and relatively stable level in the following years suggest a potential effort to reduce leverage or optimize the capital structure.
The fluctuations in the financial leverage ratio of Olin Corp. over the years highlight the company's evolving approach to debt management and capital structure decisions. Further analysis of Olin Corp.'s overall financial health, profitability, and liquidity position would be necessary to better understand the implications of these leverage ratio movements.
Peer comparison
Dec 31, 2023