Raytheon Technologies Corp (RTX)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 161,869,000 | 158,864,000 | 161,404,000 | 162,153,000 | 139,615,000 |
| Total stockholders’ equity | US$ in thousands | 59,798,000 | 72,632,000 | 73,068,000 | 72,163,000 | 41,774,000 |
| Financial leverage ratio | 2.71 | 2.19 | 2.21 | 2.25 | 3.34 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $161,869,000K ÷ $59,798,000K
= 2.71
The financial leverage ratio for RTX Corp has shown fluctuations over the past five years. It increased from 3.34 in 2019 to 2.25 in 2020, indicating a decrease in financial leverage. However, in the subsequent years, the ratio increased to 2.71 in 2023, with fluctuations observed in between.
A financial leverage ratio above 2 suggests that the company relies more on debt financing than equity, which can magnify returns but also increase financial risk. The upward trend in the ratio in recent years may signify increased debt levels relative to equity, potentially indicating a higher risk profile for RTX Corp.
It is essential for stakeholders to closely monitor the financial leverage ratio and assess the company's ability to manage its debt levels effectively, maintain financial stability, and continue generating sustainable returns. Further analysis of RTX Corp's capital structure and debt management practices may provide more insights into its overall financial health and risk profile.
Peer comparison
Dec 31, 2023