Sonoco Products Company (SON)
Financial leverage ratio
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 12,507,800 | 9,042,860 | 7,154,660 | 7,198,280 | 7,191,960 | 7,270,000 | 7,048,990 | 7,061,430 | 7,089,910 | 6,975,650 | 6,989,510 | 6,955,990 | 5,085,330 | 4,925,150 | 4,994,040 | 5,280,750 | 5,277,260 | 5,767,230 | 5,738,860 | 5,012,140 |
| Total stockholders’ equity | US$ in thousands | 2,286,210 | 2,478,940 | 2,434,640 | 2,427,480 | 2,431,840 | 2,339,160 | 2,299,320 | 2,205,560 | 2,072,800 | 1,935,080 | 1,929,680 | 1,918,930 | 1,849,540 | 1,860,730 | 1,822,430 | 1,912,800 | 1,910,530 | 1,881,330 | 1,807,700 | 1,755,440 |
| Financial leverage ratio | 5.47 | 3.65 | 2.94 | 2.97 | 2.96 | 3.11 | 3.07 | 3.20 | 3.42 | 3.60 | 3.62 | 3.62 | 2.75 | 2.65 | 2.74 | 2.76 | 2.76 | 3.07 | 3.17 | 2.86 |
December 31, 2024 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $12,507,800K ÷ $2,286,210K
= 5.47
The financial leverage ratio measures the proportion of a company's debt to its equity, reflecting its level of financial risk and dependency on debt financing.
Analyzing the financial leverage ratio of Sonoco Products Company from March 31, 2020, to December 31, 2024, we observe fluctuations over the period. The ratio stood at 2.86 on March 31, 2020, and increased to 3.17 by June 30, 2020, indicating an increase in leverage. Subsequently, the ratio decreased to 2.76 by December 31, 2020, before stabilizing around 2.76 to 2.74 until June 30, 2021.
From September 30, 2021, to December 31, 2024, there was a noticeable upward trend in the financial leverage ratio, reaching a peak of 5.47 on December 31, 2024. This substantial increase in leverage from around 2.75 to 5.47 suggests a significant rise in debt relative to equity during this period.
The spike in the financial leverage ratio in the latter part of the period could indicate various factors such as aggressive expansion, acquisitions, or perhaps challenges in generating sufficient cash flow to support the debt load. A high financial leverage ratio implies higher financial risk for the company, as it indicates a greater reliance on borrowed funds.
It would be crucial for stakeholders to closely monitor Sonoco Products Company's leverage levels and ensure that the company can manage its debt obligations effectively while sustaining its financial health and growth prospects.
Peer comparison
Dec 31, 2024