Ralph Lauren Corp Class A (RL)

Financial leverage ratio

		Mar 31, 2025	Mar 31, 2024	Mar 31, 2023	Mar 31, 2022	Mar 31, 2021
Total assets	US$ in thousands	7,047,300	6,602,600	6,789,500	7,724,700	7,887,500
Total stockholders’ equity	US$ in thousands	2,588,500	2,450,300	2,430,500	2,536,000	2,604,400
Financial leverage ratio		2.72	2.69	2.79	3.05	3.03

March 31, 2025 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $7,047,300K ÷ $2,588,500K
= 2.72

The financial leverage ratio of Ralph Lauren Corp Class A has shown a fluctuating trend over the past five years. As of March 31, 2021, the ratio stood at 3.03, indicating that the company had $3.03 in debt for every $1 of equity. Over the following years, the ratio increased slightly to 3.05 by March 31, 2022, before declining to 2.79 by March 31, 2023, and further dropping to 2.69 by March 31, 2024. This decrease in the ratio suggests a reduction in the company's reliance on debt financing compared to equity.

However, by March 31, 2025, the financial leverage ratio slightly increased to 2.72. While the ratio remains above 2, indicating that the company still has a significant amount of debt in its capital structure, the downward trend observed in the earlier years signifies a potential improvement in the company's financial risk management and solvency position. It is essential for stakeholders to continue monitoring the financial leverage ratio to assess Ralph Lauren Corp's ability to meet its financial obligations and manage its debt levels effectively.