Sonoco Products Company (SON)
Financial leverage ratio
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 12,507,800 | 7,191,960 | 7,089,910 | 5,085,330 | 5,277,260 |
| Total stockholders’ equity | US$ in thousands | 2,271,610 | 2,424,340 | 2,072,800 | 1,849,540 | 1,910,530 |
| Financial leverage ratio | 5.51 | 2.97 | 3.42 | 2.75 | 2.76 |
December 31, 2024 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $12,507,800K ÷ $2,271,610K
= 5.51
The financial leverage ratio for Sonoco Products Company has shown some fluctuations over the past five years. In December 2020, the ratio was 2.76, slightly decreasing to 2.75 in December 2021. However, there was a significant increase to 3.42 in December 2022, indicating a higher level of financial leverage. Subsequently, the ratio decreased to 2.97 in December 2023, before sharply rising to 5.51 in December 2024.
These fluctuations in the financial leverage ratio suggest that Sonoco Products Company has been managing its debt levels differently each year. A higher financial leverage ratio indicates that the company is relying more on debt financing, which may increase financial risk but also potentially lead to higher returns for shareholders. Conversely, a lower ratio signifies a lesser reliance on debt for operations.
It is important for stakeholders to closely monitor these changes in the financial leverage ratio to assess the company's capital structure and risk profile, as well as its ability to meet its financial obligations and maintain sustainable growth over time.
Peer comparison
Dec 31, 2024