Reliance Steel & Aluminum Co (RS)
Financial leverage ratio
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 10,021,800 | 10,480,300 | 10,329,900 | 9,536,000 | 8,106,800 |
| Total stockholders’ equity | US$ in thousands | 7,219,600 | 7,722,300 | 7,087,400 | 6,086,500 | 5,115,400 |
| Financial leverage ratio | 1.39 | 1.36 | 1.46 | 1.57 | 1.58 |
December 31, 2024 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $10,021,800K ÷ $7,219,600K
= 1.39
The financial leverage ratio of Reliance Steel & Aluminum Co has shown a gradual decrease from 1.58 in December 31, 2020, to 1.39 in December 31, 2024. This suggests that the company's reliance on debt has been reducing over the period analyzed. However, it is essential to note that a financial leverage ratio of greater than 1 indicates that the company has more debt than equity in its capital structure. The decreasing trend in this ratio could signify a successful effort by the company to reduce its debt levels and potentially lower financial risk. It would be prudent for stakeholders to continue monitoring this ratio to ensure the company maintains a healthy balance between debt and equity in its capital structure.