Parker-Hannifin Corporation (PH)

Financial leverage ratio

		Jun 30, 2024	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020
Total assets	US$ in thousands	29,297,800	29,964,500	25,943,900	20,341,200	19,887,800
Total stockholders’ equity	US$ in thousands	12,072,000	10,326,900	8,848,010	8,398,310	6,227,220
Financial leverage ratio		2.43	2.90	2.93	2.42	3.19

June 30, 2024 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $29,297,800K ÷ $12,072,000K
= 2.43

The financial leverage ratio of Parker-Hannifin Corporation has exhibited some fluctuations over the past five years. As of June 30, 2024, the financial leverage ratio stands at 2.43, showing a decrease compared to the previous year. This implies that the company's level of financial leverage, or the extent to which it relies on debt financing, has reduced.

In the preceding year, the financial leverage ratio was higher at 2.90, indicating a higher level of debt usage to finance its operations. The trend continues in 2022, where the ratio was 2.93, further demonstrating increased leverage.

Conversely, in 2021, the financial leverage ratio was lower at 2.42, suggesting a decreased reliance on debt to support the company's assets. The highest ratio over the period was observed in 2020 at 3.19, reflecting a substantial reliance on debt financing.

Overall, the varying financial leverage ratios suggest that Parker-Hannifin Corporation has adjusted its capital structure over the years, potentially managing its debt levels to optimize its financial position. The recent decrease in the ratio could indicate a strategic shift towards a more conservative debt approach, which may help enhance the company's financial stability and resilience in the long run.