RH (RH)
Financial leverage ratio
| Jan 31, 2025 | Feb 3, 2024 | Jan 31, 2024 | Jan 31, 2023 | Jan 28, 2023 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 4,554,690 | 4,143,900 | 4,143,900 | 5,309,290 | 5,309,290 |
| Total stockholders’ equity | US$ in thousands | -163,589 | -297,394 | -297,394 | 784,661 | 784,661 |
| Financial leverage ratio | — | — | — | 6.77 | 6.77 |
January 31, 2025 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $4,554,690K ÷ $-163,589K
= —
The financial leverage ratio for RH, as per the provided data, was 6.77 for January 28, 2023, and remained consistent at 6.77 for January 31, 2023. However, data is not available for subsequent periods including January 31, 2024, February 3, 2024, and January 31, 2025.
A financial leverage ratio of 6.77 indicates that the company relies more on debt financing rather than equity to fund its operations and growth. This level of leverage suggests that a significant portion of RH's assets are funded through debt, which can amplify returns when business is good but can also pose risks, such as higher interest payments and financial strain during economic downturns. It would be important for RH to monitor and manage its leverage ratio effectively to ensure a healthy balance between debt and equity financing.