Smurfit WestRock plc (SW)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|
| Total assets | US$ in thousands | 12,628,000 | 12,482,000 | 11,707,000 | 10,290,000 |
| Total stockholders’ equity | US$ in thousands | 5,560,000 | 5,025,000 | 4,379,000 | 3,770,000 |
| Financial leverage ratio | 2.27 | 2.48 | 2.67 | 2.73 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $12,628,000K ÷ $5,560,000K
= 2.27
The financial leverage ratio of Smurfit WestRock plc has shown a decreasing trend over the past four years, indicating a reduction in the company's reliance on debt to finance its operations. In 2020, the financial leverage ratio stood at 2.73, which gradually decreased to 2.67 in 2021, further decreasing to 2.48 in 2022, and ultimately reaching 2.27 in 2023.
This declining trend in the financial leverage ratio suggests that Smurfit WestRock plc has been gradually reducing its debt levels relative to its equity, which may indicate improved financial stability and lower financial risk. Lower leverage ratios generally indicate a healthier balance sheet and better ability to weather economic challenges.
Overall, the decreasing trend in the financial leverage ratio of Smurfit WestRock plc reflects a prudent approach to managing its capital structure and indicates a stronger financial position compared to previous years.
Peer comparison
Dec 31, 2023