TE Connectivity Ltd (TEL)
Financial leverage ratio
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 21,712,000 | 20,782,000 | 21,462,000 | 19,242,000 | 19,694,000 |
| Total stockholders’ equity | US$ in thousands | 11,551,000 | 10,897,000 | 10,748,000 | 9,495,000 | 10,570,000 |
| Financial leverage ratio | 1.88 | 1.91 | 2.00 | 2.03 | 1.86 |
September 30, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $21,712,000K ÷ $11,551,000K
= 1.88
TE Connectivity Ltd's financial leverage ratio has seen fluctuations over the past five years. The ratio decreased from 2.03 in 2020 to 1.86 in 2019, indicating a reduction in financial leverage during that period. However, from 2019 to 2021, the ratio increased to 2.00 before decreasing slightly to 1.91 in 2022 and further to 1.88 in 2023.
A financial leverage ratio above 1 indicates that the company is relying more on debt to finance its assets. TE Connectivity Ltd's ratios over the years suggest that the company has been gradually decreasing its reliance on debt financing. This trend could be a strategic decision by the company to reduce its financial risk and improve its financial stability.
It is essential for stakeholders to closely monitor TE Connectivity Ltd's financial leverage ratio trends to assess the company's overall financial health and risk profile. Further analysis of the company's debt structure and repayment capabilities would provide a more comprehensive understanding of its financial leverage position.
Peer comparison
Sep 30, 2023