Omnicom Group Inc (OMC)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 28,044,600 | 27,002,500 | 28,421,800 | 27,647,200 | 26,783,400 |
| Total stockholders’ equity | US$ in thousands | 3,616,300 | 3,252,100 | 3,270,200 | 3,084,400 | 2,853,900 |
| Financial leverage ratio | 7.76 | 8.30 | 8.69 | 8.96 | 9.38 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $28,044,600K ÷ $3,616,300K
= 7.76
The financial leverage ratio of Omnicom Group, Inc. has shown a declining trend over the past five years, decreasing from 9.38 in 2019 to 7.76 in 2023. This indicates that the company's reliance on debt to finance its operations has been decreasing over time.
A lower financial leverage ratio generally suggests a lower level of financial risk, as the company is less dependent on debt financing. It also indicates a stronger equity position, as less debt is used to support the company's assets.
Omnicom Group, Inc. has been gradually reducing its financial leverage, which could be a positive sign for investors and creditors as it may lead to a more stable financial position and better ability to weather economic downturns. However, it's important to consider that a very low leverage ratio may also indicate underutilization of debt and potential missed opportunities for growth or leveraging available financial resources.
Overall, the decreasing trend in Omnicom Group, Inc.'s financial leverage ratio over the five-year period suggests a move towards a more conservative financial structure and a potentially healthier balance sheet.
Peer comparison
Dec 31, 2023