JM Smucker Company (SJM)
Financial leverage ratio
| Apr 30, 2025 | Apr 30, 2024 | Apr 30, 2023 | Apr 30, 2022 | Apr 30, 2021 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 17,563,300 | 20,273,700 | 14,991,400 | 16,055,000 | 16,284,200 |
| Total stockholders’ equity | US$ in thousands | 6,082,600 | 7,693,900 | 7,290,800 | 8,140,100 | 8,124,800 |
| Financial leverage ratio | 2.89 | 2.64 | 2.06 | 1.97 | 2.00 |
April 30, 2025 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $17,563,300K ÷ $6,082,600K
= 2.89
The financial leverage ratio of JM Smucker Company has exhibited a general upward trend over the period from April 30, 2021, to April 30, 2025. Specifically, the ratio was 2.00 on April 30, 2021, marginally decreased to 1.97 by April 30, 2022, indicating a slight reduction in leverage during that period. However, the ratio subsequently increased to 2.06 as of April 30, 2023, suggesting a modest rise in financial leverage. The upward trajectory becomes more pronounced in the following years, with the ratio rising to 2.64 by April 30, 2024, and further increasing to 2.89 by April 30, 2025.
This pattern indicates an overall increase in JM Smucker Company’s use of debt financing relative to its equity over the observed period. The rising leverage ratio suggests the company has progressively relied more on borrowed funds to finance its assets, which could imply strategies aimed at leveraging debt to support growth initiatives or shareholder returns. The ongoing increase, especially in the most recent years, highlights a potential shift towards higher financial risk due to increased debt levels relative to equity, which warrants attention from stakeholders regarding the company's borrowing policies and risk management practices.