Solventum Corp. (SOLV)
Financial leverage ratio
| Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | ||
|---|---|---|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 14,711,000 | 14,377,000 | 13,873,000 | 14,311,000 | 13,641,000 | 13,594,000 | — | — |
| Total stockholders’ equity | US$ in thousands | 3,851,000 | 3,409,000 | 3,250,000 | 3,964,000 | 11,742,000 | 11,742,000 | — | — |
| Financial leverage ratio | 3.82 | 4.22 | 4.27 | 3.61 | 1.16 | 1.16 | — | — |
March 31, 2024 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $14,711,000K ÷ $3,851,000K
= 3.82
Solventum Corp.'s financial leverage ratio has fluctuated over the past few quarters, indicating varying levels of financial risk and reliance on debt to finance its operations.
As of March 31, 2024, the financial leverage ratio stood at 3.82, showing a decrease from the previous quarter. This suggests that the company's debt levels relative to its equity have slightly improved, indicating a stronger financial position.
In contrast, the financial leverage ratio was highest at 4.27 as of September 30, 2023, indicating a higher proportion of debt in the capital structure compared to equity. This level of leverage may pose increased financial risk for the company, especially if economic conditions deteriorate.
The significant increase in the financial leverage ratio from 1.16 in March 2023, to 4.27 in September 2023, raises concerns about Solventum Corp.'s increasing reliance on debt during that period. However, the ratio has since decreased, which could indicate management's efforts to reduce leverage and strengthen the balance sheet.
It is essential for stakeholders to closely monitor Solventum Corp.'s financial leverage ratio trends to assess the company's ability to meet its financial obligations and maintain financial stability in the long run.
Peer comparison
Mar 31, 2024