Sherwin-Williams Co (SHW)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 22,954,000 | 22,594,000 | 20,667,000 | 20,401,600 | 20,496,200 |
| Total stockholders’ equity | US$ in thousands | 3,715,800 | 3,102,100 | 2,437,200 | 3,610,800 | 4,123,300 |
| Financial leverage ratio | 6.18 | 7.28 | 8.48 | 5.65 | 4.97 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $22,954,000K ÷ $3,715,800K
= 6.18
The financial leverage ratio of Sherwin-Williams Co. has displayed fluctuations over the past five years. In 2023, the ratio decreased to 6.18 from 7.28 in 2022, indicating a reduction in the company’s reliance on debt to finance its operations. This decrease in financial leverage suggests that the company may have improved its financial stability and reduced the risk associated with high levels of debt.
In comparison to 2021 and 2020, the financial leverage ratio was higher in those years at 8.48 and 5.65, respectively. This suggests that Sherwin-Williams Co. was more leveraged in those years, potentially indicating a higher level of financial risk and dependency on borrowed funds. Prior to 2020, in 2019, the financial leverage ratio was 4.97, which was lower compared to subsequent years.
Overall, the fluctuation in Sherwin-Williams Co.'s financial leverage ratio indicates changes in the company's capital structure and debt management practices over the years. The recent decrease in the ratio may signify a shift towards a more conservative financial strategy, potentially enhancing the company's financial health and resilience.
Peer comparison
Dec 31, 2023