Scotts Miracle-Gro Company (SMG)
Financial leverage ratio
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 2,871,900 | 3,413,700 | 4,296,800 | 4,800,000 | 3,380,500 |
| Total stockholders’ equity | US$ in thousands | -390,600 | -267,300 | 147,700 | 1,013,300 | 697,200 |
| Financial leverage ratio | — | — | 29.09 | 4.74 | 4.85 |
September 30, 2024 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $2,871,900K ÷ $-390,600K
= —
The financial leverage ratio of Scotts Miracle-Gro Company has shown a significant increase over the past three years. In 2022, the financial leverage ratio was notably higher at 29.09 compared to 4.74 in 2021 and 4.85 in 2020. This increase in the financial leverage ratio indicates that the company has been relying more on debt to finance its operations and growth initiatives in 2022.
A higher financial leverage ratio suggests that Scotts Miracle-Gro Company has increased its debt levels relative to its equity, which can potentially amplify returns for shareholders but also exposes the company to higher financial risk due to the obligation of repaying debt. It is crucial for the company to manage its debt levels effectively to ensure it remains financially stable and can meet its debt obligations in the long term.
Further analysis of the company's financial statements and debt management strategies would be beneficial to assess the potential impact of the increasing financial leverage ratio on its overall financial health and sustainability.
Peer comparison
Sep 30, 2024