Tempur Sealy International Inc (TPX)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 4,553,900 | 4,359,800 | 4,323,400 | 3,308,600 | 3,061,800 |
| Total stockholders’ equity | US$ in thousands | 333,400 | -12,300 | 285,800 | 503,600 | 359,500 |
| Financial leverage ratio | 13.66 | — | 15.13 | 6.57 | 8.52 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $4,553,900K ÷ $333,400K
= 13.66
The financial leverage ratio measures the extent to which a company relies on debt to finance its operations. Looking at Tempur Sealy International Inc's financial leverage ratio over the past five years, we can observe fluctuations in this metric.
In 2019, the financial leverage ratio stood at 8.52, indicating that the company's reliance on debt was moderate at that time. However, this ratio increased significantly to 15.13 in 2021, suggesting a substantial increase in debt usage relative to equity to fund its operations.
The financial leverage ratio then decreased to 6.57 in 2020, which might signify a reduction in debt levels compared to the previous year. In 2023, the ratio increased to 14.08, reflecting a return to higher debt utilization relative to equity in the company's capital structure.
It is essential to note that a high financial leverage ratio indicates higher financial risk due to increased debt obligations. Conversely, a lower ratio implies a more conservative financial structure with less reliance on debt financing.
Overall, Tempur Sealy International Inc's financial leverage ratio has shown notable fluctuations over the years, indicating varying degrees of reliance on debt financing, which may have implications for the company's financial risk and stability.
Peer comparison
Dec 31, 2023