Titan International Inc (TWI)

Financial leverage ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Total assets	US$ in thousands	1,289,240	1,284,630	1,182,680	1,031,880	1,114,310
Total stockholders’ equity	US$ in thousands	467,060	381,236	229,300	179,264	234,851
Financial leverage ratio		2.76	3.37	5.16	5.76	4.74

December 31, 2023 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $1,289,240K ÷ $467,060K
= 2.76

The financial leverage ratio for Titan International, Inc. has shown a decreasing trend over the past five years. In 2023, the financial leverage ratio was 2.76, down from 3.37 in 2022, indicating that the company's reliance on debt to finance its operations decreased. The declining trend is notable, as the ratio was at a high of 5.76 in 2020 and has since shown a consistent decrease.

A financial leverage ratio of 2.76 in 2023 suggests that the company's total assets are 2.76 times larger than its total equity. This implies that a significant portion of the company's assets is financed through debt, although the level of leverage has decreased compared to prior years.

A lower financial leverage ratio can indicate a lower level of financial risk for the company, as it suggests that the company is less dependent on debt financing. However, it is essential to consider the optimal level of leverage for the industry in which Titan International operates, as well as the company's growth and profitability objectives.

Overall, the decreasing trend in Titan International's financial leverage ratio may signal a shift towards a more conservative capital structure and a potentially stronger financial position. It is important for investors and stakeholders to monitor this ratio alongside other financial metrics to assess the company's financial health and risk profile accurately.