Packaging Corp of America (PKG)
Financial leverage ratio
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 8,833,200 | 8,753,800 | 8,982,100 | 8,857,000 | 8,881,400 | 8,177,600 | 8,106,500 | 8,049,000 | 8,003,800 | 8,344,400 | 8,340,600 | 8,137,800 | 7,836,800 | 8,630,800 | 7,673,600 | 7,549,000 | 7,433,200 | 7,372,600 | 7,272,000 | 7,347,600 |
| Total stockholders’ equity | US$ in thousands | 4,404,000 | 4,263,600 | 4,126,600 | 4,031,000 | 3,997,300 | 3,887,200 | 3,848,600 | 3,757,700 | 3,667,100 | 3,971,200 | 3,964,500 | 3,779,300 | 3,607,200 | 3,608,300 | 3,444,300 | 3,331,200 | 3,246,300 | 3,205,400 | 3,133,100 | 3,149,900 |
| Financial leverage ratio | 2.01 | 2.05 | 2.18 | 2.20 | 2.22 | 2.10 | 2.11 | 2.14 | 2.18 | 2.10 | 2.10 | 2.15 | 2.17 | 2.39 | 2.23 | 2.27 | 2.29 | 2.30 | 2.32 | 2.33 |
December 31, 2024 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $8,833,200K ÷ $4,404,000K
= 2.01
The financial leverage ratio of Packaging Corp of America has shown a declining trend over the past few years, indicating improved financial stability and lower reliance on debt financing. The ratio decreased from 2.33 as of March 31, 2020, to 2.01 by December 31, 2024. This suggests that the company is effectively managing its debt levels and may have been reducing its debt over this period.
However, there was some fluctuation within this decreasing trend, with minor increases observed in certain quarters such as September 30, 2021 (2.39) and December 31, 2022 (2.18). Despite these slight fluctuations, the overall trajectory of the financial leverage ratio remains downward.
A financial leverage ratio below 1 indicates that a company is mainly funded by equity, while a ratio above 1 suggests higher reliance on debt. In the case of Packaging Corp of America, the ratio consistently stayed above 1 throughout the period, indicating that the company has been using a mix of equity and debt to finance its operations.
Overall, the decreasing trend in the financial leverage ratio of Packaging Corp of America signals a strengthening financial position, with the company gradually reducing its leverage and potentially enhancing its ability to weather economic downturns or invest in growth opportunities.
Peer comparison
Dec 31, 2024