Parker-Hannifin Corporation (PH)

Financial leverage ratio

		Jun 30, 2025	Jun 30, 2024	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021
Total assets	US$ in thousands	29,494,000	29,297,800	29,964,500	25,943,900	20,341,200
Total stockholders’ equity	US$ in thousands	13,682,000	12,072,000	10,326,900	8,848,010	8,398,310
Financial leverage ratio		2.16	2.43	2.90	2.93	2.42

June 30, 2025 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $29,494,000K ÷ $13,682,000K
= 2.16

The financial leverage ratio of Parker-Hannifin Corporation has exhibited notable fluctuations over the analyzed period from June 30, 2021, to June 30, 2025. As of June 30, 2021, the ratio stood at 2.42, indicating a moderate level of leverage. The subsequent year saw a significant increase to 2.93 by June 30, 2022, suggesting that the company utilized more debt relative to its equity, thereby increasing its financial leverage.

However, the ratio experienced a slight decline in the following year, decreasing marginally to 2.90 as of June 30, 2023. This indicates a stabilization or a small reduction in leverage, although it remained close to the previous year's level. Moving into the period ending June 30, 2024, the ratio declined further to 2.43, signaling a reduction in financial leverage. The most recent data point, as of June 30, 2025, shows the ratio at 2.16, representing a continued downward trend.

Overall, the pattern of Parker-Hannifin's financial leverage ratio reflects an initial increase from 2021 to 2022, followed by a gradual and steady decline through 2023 to 2025. This trend may suggest a strategic shift towards reducing financial risk through deleveraging, or an increase in equity relative to debt in response to market or internal financial considerations. The decreasing leverage ratio over the last two years indicates an effort to strengthen the company's balance sheet and potentially improve its financial stability and flexibility.