Textron Inc (TXT)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 16,856,000 | 16,293,000 | 15,827,000 | 15,443,000 | 15,018,000 |
| Total stockholders’ equity | US$ in thousands | 6,987,000 | 7,113,000 | 6,815,000 | 5,845,000 | 5,518,000 |
| Financial leverage ratio | 2.41 | 2.29 | 2.32 | 2.64 | 2.72 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $16,856,000K ÷ $6,987,000K
= 2.41
The financial leverage ratio of Textron Inc has been fluctuating over the past five years, ranging from 2.29 to 2.72. The ratio indicates the level of debt in the company's capital structure relative to equity. A higher financial leverage ratio implies a greater reliance on debt financing to support the operations and investments of the company.
In the case of Textron Inc, the ratio decreased from 2.72 in 2019 to 2.29 in 2022, suggesting a reduction in the proportion of debt in the company's capital structure during that period. However, there was an increase in leverage to 2.64 in 2020 and then a slight increase to 2.32 in 2021 before rising again to 2.41 in 2023. These fluctuations indicate changes in the company's debt levels relative to equity over the years.
A lower financial leverage ratio can indicate a more conservative capital structure with lower financial risk, while a higher ratio may suggest higher financial risk due to increased reliance on debt financing. It is important for investors and stakeholders to monitor the trend in the financial leverage ratio of Textron Inc to assess the company's risk profile and financial health.
Peer comparison
Dec 31, 2023