Trane Technologies plc (TT)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 19,391,900 | 18,081,600 | 18,059,800 | 18,156,700 | 20,492,300 |
| Total stockholders’ equity | US$ in thousands | 6,995,200 | 6,088,600 | 6,255,900 | 6,407,700 | 7,267,600 |
| Financial leverage ratio | 2.77 | 2.97 | 2.89 | 2.83 | 2.82 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $19,391,900K ÷ $6,995,200K
= 2.77
Trane Technologies plc's financial leverage ratio has shown a fluctuating trend over the past five years. The ratio decreased from 2.82 in 2019 to 2.77 in 2023, indicating a reduction in the company's reliance on debt to finance its operations and assets. However, there was an increase in the ratio in 2022 to 2.97, which suggests a higher level of financial leverage compared to the previous year.
Overall, the company's financial leverage ratio has remained relatively stable within the range of 2.77 to 2.97, with a slight downward trend in recent years. This indicates that Trane Technologies plc's capital structure is moderately leveraged, with a significant portion of its assets financed by debt. It is important for the company to carefully manage its debt levels to ensure financial stability and mitigate risks associated with high leverage.