RXO Inc. (RXO)
Financial leverage ratio
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 3,414,000 | 1,825,000 | 2,038,000 | 2,068,000 | 1,870,000 |
| Total stockholders’ equity | US$ in thousands | 1,612,000 | 594,000 | 589,000 | 1,070,000 | 1,068,000 |
| Financial leverage ratio | 2.12 | 3.07 | 3.46 | 1.93 | 1.75 |
December 31, 2024 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $3,414,000K ÷ $1,612,000K
= 2.12
The financial leverage ratio of RXO Inc. has shown a fluctuating trend over the past five years, indicating changes in the company's debt structure relative to its equity. The ratio stood at 1.75 as of December 31, 2020, signifying that the company had $1.75 in debt for every $1 of equity. This ratio increased to 1.93 by December 31, 2021, suggesting a slight increase in leverage.
However, a significant spike in the financial leverage ratio was observed by December 31, 2022, reaching 3.46. This sharp increase indicates a substantial rise in debt relative to equity, which could potentially raise concerns about the company's financial risk and solvency.
By December 31, 2023, the ratio decreased to 3.07, although it remained at elevated levels, suggesting that the company's leverage position was still relatively high. Lastly, by December 31, 2024, the financial leverage ratio decreased to 2.12, indicating a reduction in debt compared to equity but still higher than the levels observed in the earlier years.
Overall, the fluctuating trend in RXO Inc.'s financial leverage ratio highlights changes in the company's capital structure and borrowing practices over the years, potentially impacting its financial stability and risk profile.
Peer comparison
Dec 31, 2024