RBC Bearings Incorporated (RBC)
Financial leverage ratio
| Mar 31, 2024 | Mar 31, 2023 | Mar 31, 2022 | Mar 31, 2021 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 4,678,600 | 4,690,400 | 4,845,400 | 1,434,260 | 1,321,910 |
| Total stockholders’ equity | US$ in thousands | 2,751,900 | 2,535,900 | 2,372,500 | 1,232,100 | 1,122,900 |
| Financial leverage ratio | 1.70 | 1.85 | 2.04 | 1.16 | 1.18 |
March 31, 2024 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $4,678,600K ÷ $2,751,900K
= 1.70
The financial leverage ratio of RBC Bearings Incorporated has exhibited fluctuations over the past five years. The ratio decreased from 2.04 in March 2022 to 1.16 in March 2021, indicating a significant reduction in financial leverage within that period. However, the ratio slightly increased to 1.18 in March 2020 before rising again to 1.85 in March 2023 and further to 1.70 in March 2024.
A financial leverage ratio above 1 indicates that the company relies more on debt financing than equity financing. The decreasing trend from 2.04 to 1.16 suggests that RBC Bearings Incorporated may have actively reduced its reliance on debt financing in March 2021, which can be considered a positive sign of financial stability and reduced risk. Subsequently, the slight increase in the ratio from 1.16 to 1.18 in March 2020 may imply a moderate reversion towards higher leverage levels.
Overall, the fluctuations in RBC Bearings Incorporated's financial leverage ratio indicate management's adjustments in the capital structure, potentially reflecting strategic decisions to balance debt and equity financing to optimize the company's financial position and risk profile.
Peer comparison
Mar 31, 2024