Powell Industries Inc (POWL)
Financial leverage ratio
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 928,180 | 752,242 | 493,380 | 436,192 | 472,278 |
| Total stockholders’ equity | US$ in thousands | 483,073 | 345,026 | 297,206 | 301,223 | 306,626 |
| Financial leverage ratio | 1.92 | 2.18 | 1.66 | 1.45 | 1.54 |
September 30, 2024 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $928,180K ÷ $483,073K
= 1.92
The financial leverage ratio of Powell Industries Inc has shown fluctuations over the past five years. The ratio has ranged from 1.45 to 2.18 during this period. A higher financial leverage ratio indicates that a company is relying more on debt to finance its operations, while a lower ratio suggests a lower level of debt relative to equity.
In 2023, the company had a higher financial leverage ratio of 2.18, which may indicate increased reliance on debt to fund its activities. This could potentially increase financial risk due to higher interest payments and debt obligations.
On the other hand, in 2021, the financial leverage ratio decreased to 1.45, suggesting a lower level of debt relative to equity. This could signify a more conservative financing approach, potentially reducing financial risk but also limiting growth opportunities that could be funded through debt.
Overall, the trend in Powell Industries Inc's financial leverage ratio indicates some variability in its capital structure over the years, which could have implications for the company's risk profile and financial flexibility. A thorough analysis of the company's financial statements and overall business strategy would be needed to fully understand the implications of these fluctuations in the financial leverage ratio.
Peer comparison
Sep 30, 2024