Penske Automotive Group Inc (PAG)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 15,671,500 | 14,114,600 | 13,464,600 | 13,247,200 | 13,942,700 |
| Total stockholders’ equity | US$ in thousands | 4,726,200 | 4,148,000 | 4,070,000 | 3,302,500 | 2,793,400 |
| Financial leverage ratio | 3.32 | 3.40 | 3.31 | 4.01 | 4.99 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $15,671,500K ÷ $4,726,200K
= 3.32
The financial leverage ratio of Penske Automotive Group Inc has shown a fluctuating trend over the past five years. The ratio decreased from 4.99 in 2019 to 3.31 in 2021, indicating a decrease in financial leverage during this period. However, in 2022, the ratio slightly increased to 3.40 before declining again to 3.32 in 2023.
A financial leverage ratio above 1 indicates that the company relies more on debt financing than equity financing. In this case, Penske Automotive Group Inc consistently maintains a financial leverage ratio above 1, suggesting a higher reliance on debt to finance its operations and growth.
While a decreasing trend in the financial leverage ratio can indicate a lower level of risk due to reduced debt, it may also imply limited financial flexibility for the company in terms of utilizing debt to support future expansion or investment opportunities.
Overall, the fluctuating nature of Penske Automotive Group Inc's financial leverage ratio over the years highlights the importance of closely monitoring the company's capital structure and debt levels to ensure sustainable financial health and operational stability.
Peer comparison
Dec 31, 2023