Powell Industries Inc (POWL)
Financial leverage ratio
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 807,949 | 752,242 | 671,098 | 587,096 | 513,672 | 493,380 | 451,804 | 439,705 | 423,800 | 436,192 | 421,961 | 440,748 | 448,310 | 472,278 | 487,198 | 446,597 | 466,451 | 467,411 | 437,106 | 413,604 |
| Total stockholders’ equity | US$ in thousands | 366,320 | 345,026 | 324,070 | 305,795 | 298,472 | 297,206 | 295,948 | 292,870 | 295,579 | 301,223 | 302,941 | 306,332 | 307,845 | 306,626 | 303,571 | 300,131 | 301,673 | 299,153 | 295,659 | 292,294 |
| Financial leverage ratio | 2.21 | 2.18 | 2.07 | 1.92 | 1.72 | 1.66 | 1.53 | 1.50 | 1.43 | 1.45 | 1.39 | 1.44 | 1.46 | 1.54 | 1.60 | 1.49 | 1.55 | 1.56 | 1.48 | 1.42 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $807,949K ÷ $366,320K
= 2.21
The financial leverage ratio measures the extent to which a company relies on debt to finance its operations. The trend of Powell Industries, Inc.'s financial leverage ratio shows an increasing pattern over the past eight quarters, reaching 2.21 at the end of December 31, 2023, from 1.50 at the end of March 31, 2022. This indicates a significant increase in the company's reliance on debt to fund its assets and operations.
Such an upward trend in the financial leverage ratio may signal heightened financial risk for the company, as increased debt can lead to higher interest payments and reduced financial flexibility. It is important for investors and stakeholders to closely monitor the company's ability to manage its debt obligations and maintain a sustainable capital structure in light of this trend.
Peer comparison
Dec 31, 2023