Sally Beauty Holdings Inc (SBH)
Financial leverage ratio
| Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 2,792,900 | 2,721,200 | 2,746,540 | 2,731,390 | 2,725,250 | 2,675,400 | 2,675,110 | 2,668,550 | 2,576,870 | 2,685,870 | 2,743,000 | 2,855,940 | 2,847,130 | 2,778,180 | 2,909,570 | 2,999,650 | 2,895,150 | 3,198,090 | 2,921,170 | 2,675,060 |
| Total stockholders’ equity | US$ in thousands | 628,535 | 577,670 | 550,850 | 541,340 | 508,748 | 487,712 | 425,888 | 373,298 | 293,636 | 295,871 | 271,866 | 281,021 | 280,741 | 222,270 | 134,833 | 98,866 | 15,443 | -69,133 | -53,195 | 2,199 |
| Financial leverage ratio | 4.44 | 4.71 | 4.99 | 5.05 | 5.36 | 5.49 | 6.28 | 7.15 | 8.78 | 9.08 | 10.09 | 10.16 | 10.14 | 12.50 | 21.58 | 30.34 | 187.47 | — | — | 1,216.49 |
September 30, 2024 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $2,792,900K ÷ $628,535K
= 4.44
Sally Beauty Holdings Inc's financial leverage ratio has shown fluctuations over the period analyzed. The ratio has been on an increasing trend, reaching a peak of 1,216.49 at the end of 2019 before dropping in subsequent periods. The ratio indicates that the company has been relying significantly on debt to finance its operations and growth, with a ratio above 1 indicating that debt is the primary source of capital.
The high financial leverage ratio suggests that Sally Beauty Holdings Inc may have a high level of debt relative to its assets, which can increase the company's financial risk and negatively impact its financial stability. It also implies that a significant portion of the company's earnings is being used to service debt obligations, potentially limiting its ability to invest in growth opportunities or weather economic downturns.
The company may need to closely monitor its debt levels and consider strategies to reduce its financial leverage to improve its financial health and long-term sustainability. Additionally, investors and stakeholders should assess the company's ability to generate sufficient cash flow to meet debt obligations and evaluate the associated risks of investing in a business with such high leverage.
Peer comparison
Sep 30, 2024