Trex Company Inc (TREX)
Financial leverage ratio
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 932,885 | 996,812 | 1,069,820 | 1,133,120 | 933,705 | 841,898 | 887,294 | 972,396 | 920,321 | 953,451 | 898,820 | 900,290 | 770,492 | 718,235 | 670,990 | 630,856 | 592,239 | 570,770 | 536,198 | 535,645 |
| Total stockholders’ equity | US$ in thousands | 716,671 | 691,651 | 623,525 | 560,177 | 518,349 | 556,538 | 641,475 | 721,065 | 725,034 | 720,809 | 648,776 | 590,143 | 588,531 | 544,064 | 499,661 | 451,723 | 449,175 | 423,550 | 391,533 | 363,157 |
| Financial leverage ratio | 1.30 | 1.44 | 1.72 | 2.02 | 1.80 | 1.51 | 1.38 | 1.35 | 1.27 | 1.32 | 1.39 | 1.53 | 1.31 | 1.32 | 1.34 | 1.40 | 1.32 | 1.35 | 1.37 | 1.47 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $932,885K ÷ $716,671K
= 1.30
The financial leverage ratio for TREX Co., Inc. has been fluctuating over the past eight quarters, indicating variations in the company's capital structure and financial risk. The ratio ranged from 1.30 to 2.02 during this period.
A financial leverage ratio above 1 suggests that the company relies more on debt financing than equity financing to support its operations and growth. A higher ratio indicates a higher level of financial leverage and potentially magnifies the company's returns on equity but also increases the risk for investors and creditors.
In the third and fourth quarters of 2023, the financial leverage ratio decreased compared to the preceding quarters, which could imply a reduction in debt relative to equity in the capital structure. This may suggest a shift towards a more conservative financing approach or a decrease in financial risk for the company.
Conversely, in the first and second quarters of 2023, the financial leverage ratio increased significantly, reaching its peak at 2.02 in Q1 2023. This surge indicates a higher reliance on debt financing, potentially for investment or expansion purposes, but also increases the financial risk for the company.
Overall, fluctuations in TREX Co., Inc.'s financial leverage ratio indicate changes in the company's capital structure and risk profile over time, which should be further analyzed in conjunction with other financial metrics to gain a comprehensive understanding of the company's financial health and performance.
Peer comparison
Dec 31, 2023