JM Smucker Company (SJM)
Financial leverage ratio
| Apr 30, 2025 | Jan 31, 2025 | Oct 31, 2024 | Jul 31, 2024 | Apr 30, 2024 | Jan 31, 2024 | Oct 31, 2023 | Jul 31, 2023 | Apr 30, 2023 | Jan 31, 2023 | Oct 31, 2022 | Jul 31, 2022 | Apr 30, 2022 | Jan 31, 2022 | Oct 31, 2021 | Jul 31, 2021 | Apr 30, 2021 | Jan 31, 2021 | Oct 31, 2020 | Jul 31, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 17,563,300 | 18,425,600 | 20,020,100 | 20,348,200 | 20,273,700 | 20,247,200 | 18,123,700 | 14,711,800 | 14,991,400 | 16,017,500 | 16,219,300 | 16,276,700 | 16,055,000 | 15,966,400 | 16,240,800 | 16,211,700 | 16,284,200 | 16,429,400 | 16,929,700 | 16,902,300 |
| Total stockholders’ equity | US$ in thousands | 6,082,600 | 6,907,300 | 7,633,100 | 7,769,500 | 7,693,900 | 7,560,100 | 7,088,900 | 7,003,400 | 7,290,800 | 8,335,000 | 8,217,300 | 8,144,300 | 8,140,100 | 8,266,900 | 8,286,400 | 8,170,300 | 8,124,800 | 8,211,600 | 8,515,000 | 8,345,200 |
| Financial leverage ratio | 2.89 | 2.67 | 2.62 | 2.62 | 2.64 | 2.68 | 2.56 | 2.10 | 2.06 | 1.92 | 1.97 | 2.00 | 1.97 | 1.93 | 1.96 | 1.98 | 2.00 | 2.00 | 1.99 | 2.03 |
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 notable increasing trend from July 31, 2020, through October 31, 2025. Initially, the ratio hovered around 2.03 in July 2020, with minor fluctuations observed in the subsequent quarters, ranging between approximately 1.92 and 2.10 through early 2023. This stability indicates a controlled level of leverage during that period.
Starting from April 30, 2023, the ratio began a marked upward trajectory, reaching 2.56 by October 31, 2023. The upward momentum continued into the subsequent periods, culminating in a ratio of approximately 2.89 as of April 30, 2025, the highest value recorded within this timeframe. This escalation suggests an increasing reliance on debt or financial leverage relative to equity over the past two years.
The sustained increase in the financial leverage ratio indicates that JM Smucker Company has progressively amplified its use of debt financing. While leveraging can enhance return on equity during periods of favorable earnings, the rising trend also implies heightened financial risk, as more of the company's capital structure is comprised of debt obligations. The company’s leverage ratios approaching and exceeding 2.6 reflect a significant leverage position, which warrants ongoing scrutiny regarding debt management and interest coverage in future periods.
Overall, the data points to a strategic shift towards higher leverage, with implications for the company's risk profile and financial flexibility going forward.