Sylvamo Corp (SLVM)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|
| Total assets | US$ in thousands | 2,872,000 | 2,710,000 | 2,597,000 |
| Total stockholders’ equity | US$ in thousands | 901,000 | 678,000 | 182,000 |
| Financial leverage ratio | 3.19 | 4.00 | 14.27 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $2,872,000K ÷ $901,000K
= 3.19
The financial leverage ratio for Sylvamo Corp has shown significant fluctuations over the past four years. In 2023, the ratio decreased to 3.19 from 4.00 in 2022. This indicates that the company's reliance on debt to finance its operations reduced, which could be a positive sign as it suggests a lower level of financial risk.
Moreover, in 2023, the financial leverage ratio of 3.19 is lower compared to the 14.27 reported in 2021, indicating a significant improvement in the company's capital structure. The sharp decrease in the ratio from 14.27 in 2021 to 3.19 in 2023 suggests that Sylvamo Corp has managed to reduce its debt levels and enhance its financial stability.
Furthermore, when compared to the ratio of 1.38 in 2020, the higher ratios in subsequent years suggest that Sylvamo Corp has increased its reliance on debt financing, albeit until 2021. The decrease in financial leverage ratio from 2021 to 2023 signals a shift towards a more balanced capital structure, which can contribute to long-term financial health and stability.
Overall, the trend in Sylvamo Corp's financial leverage ratio indicates efforts to reduce debt and improve its financial position, demonstrating a positive impact on the company's overall risk profile and potentially enhancing shareholder value.
Peer comparison
Dec 31, 2023