Stepan Company (SCL)
Financial leverage ratio
| Dec 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 2,304,650 | 2,413,790 | 2,348,590 | 2,373,150 | 2,363,350 | 2,333,530 | 2,430,820 | 2,445,940 | 2,433,170 | 2,336,770 | 2,288,800 | 2,272,600 | 2,065,610 | 1,955,940 | 1,887,300 | 1,827,940 | 1,752,340 | 1,617,650 | 1,543,410 | 1,506,300 |
| Total stockholders’ equity | US$ in thousands | 1,169,930 | 1,219,360 | 1,192,440 | 1,214,520 | 1,216,490 | 1,202,770 | 1,215,100 | 1,189,910 | 1,166,060 | 1,130,240 | 1,125,710 | 1,116,740 | 1,074,190 | 1,057,300 | 1,048,800 | 1,002,280 | 986,693 | 938,193 | 897,429 | 866,778 |
| Financial leverage ratio | 1.97 | 1.98 | 1.97 | 1.95 | 1.94 | 1.94 | 2.00 | 2.06 | 2.09 | 2.07 | 2.03 | 2.04 | 1.92 | 1.85 | 1.80 | 1.82 | 1.78 | 1.72 | 1.72 | 1.74 |
December 31, 2024 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $2,304,650K ÷ $1,169,930K
= 1.97
The financial leverage ratio of Stepan Company has shown a fluctuating trend over the years analyzed. The ratio increased from 1.74 as at March 31, 2020, reaching its highest point of 2.09 by December 31, 2022, before slightly decreasing to 1.94 by the end of December 31, 2023. Subsequently, the ratio has been relatively stable around the 1.95 to 1.98 range from March 31, 2024, to September 30, 2024.
A financial leverage ratio above 1 indicates that the company relies more on debt to finance its operations than equity. Stepan Company's increasing ratio trend until 2022 may suggest a higher level of financial risk as the company took on more debt relative to equity. While the slight decrease in the ratio in 2023 could indicate a move towards a more balanced capital structure, the subsequent stability suggests a maintained level of leverage.
It is important for stakeholders to monitor changes in the financial leverage ratio as it can impact the company's risk profile, cost of capital, and overall financial health.
Peer comparison
Dec 31, 2024