Trex Company Inc (TREX)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 932,885 | 933,705 | 920,321 | 770,492 | 592,239 |
| Total stockholders’ equity | US$ in thousands | 716,671 | 518,349 | 725,034 | 588,531 | 449,175 |
| Financial leverage ratio | 1.30 | 1.80 | 1.27 | 1.31 | 1.32 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $932,885K ÷ $716,671K
= 1.30
The financial leverage ratio of TREX Co., Inc. has shown fluctuations over the past five years. In 2023, the financial leverage ratio decreased to 1.30 from 1.80 in 2022, indicating a reduction in the company's reliance on debt to finance its operations. This suggests a potential improvement in the company's financial health and risk management.
Comparing to 2021 where the ratio was 1.27, the increase in 2023 could signify a slightly higher level of debt used in the company's capital structure. However, the ratio remains relatively stable compared to previous years such as 2021, 2020, and 2019 where it ranged between 1.31 and 1.32.
Overall, the downward trend in the financial leverage ratio over the past year indicates a potential shift towards a more conservative capital structure, with a decreased reliance on debt financing. This could lead to lower financial risk and increased stability for TREX Co., Inc.
Peer comparison
Dec 31, 2023