Pool Corporation (POOL)
Financial leverage ratio
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 3,368,180 | 3,428,070 | 3,565,440 | 3,230,130 | 1,739,670 |
| Total stockholders’ equity | US$ in thousands | 1,273,460 | 1,312,790 | 1,235,190 | 1,071,390 | 639,470 |
| Financial leverage ratio | 2.64 | 2.61 | 2.89 | 3.01 | 2.72 |
December 31, 2024 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $3,368,180K ÷ $1,273,460K
= 2.64
The financial leverage ratio, which measures the extent to which a company relies on debt to finance its operations, for Pool Corporation has fluctuated over the past five years. As of December 31, 2020, the ratio stood at 2.72, indicating that the company had $2.72 in debt for every $1 of equity.
By December 31, 2021, the financial leverage ratio had increased to 3.01, suggesting a higher level of debt relative to equity. Subsequently, by December 31, 2022, the ratio decreased to 2.89, indicating some reduction in the reliance on debt.
However, by December 31, 2023, the financial leverage ratio dropped further to 2.61, signaling a lower reliance on debt compared to the previous year. Lastly, as of December 31, 2024, the ratio increased slightly to 2.64.
Overall, Pool Corporation's financial leverage ratio has shown some variability but has generally remained within a moderate range over the past five years. It is important for investors and stakeholders to monitor this ratio to assess the company's risk exposure and financial stability.