Unifirst Corporation (UNF)
Financial leverage ratio
| Aug 26, 2023 | Aug 27, 2022 | Aug 28, 2021 | Aug 29, 2020 | Aug 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 2,569,980 | 2,427,970 | 2,381,060 | 2,199,030 | 2,047,320 |
| Total stockholders’ equity | US$ in thousands | 2,003,960 | 1,915,870 | 1,872,950 | 1,741,130 | 1,641,230 |
| Financial leverage ratio | 1.28 | 1.27 | 1.27 | 1.26 | 1.25 |
August 26, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $2,569,980K ÷ $2,003,960K
= 1.28
The financial leverage ratio of Unifirst Corp. has shown a slight increasing trend over the past five years, from 1.25 in 2019 to 1.28 in 2023. This indicates that the company's reliance on debt financing relative to equity has been gradually rising. Higher financial leverage can amplify returns on equity when operating income exceeds the cost of debt, but it also increases the risk of insolvency when operating income falls below the cost of debt. It would be prudent for stakeholders to closely monitor the company's ability to service its debt obligations in the future, given the upward trend in the financial leverage ratio.
Peer comparison
Aug 26, 2023