Union Pacific Corporation (UNP)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 67,132,000 | 65,449,000 | 63,525,000 | 62,398,000 | 61,673,000 |
| Total stockholders’ equity | US$ in thousands | 14,788,000 | 12,163,000 | 14,161,000 | 16,958,000 | 18,128,000 |
| Financial leverage ratio | 4.54 | 5.38 | 4.49 | 3.68 | 3.40 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $67,132,000K ÷ $14,788,000K
= 4.54
The financial leverage ratio of Union Pacific Corp. has fluctuated over the past five years. In 2023, the financial leverage ratio improved to 4.54 from 5.38 in 2022, indicating a reduction in the company's reliance on debt to finance its operations. This reduction in leverage suggests improved financial health and reduced financial risk for the company.
Comparing the current ratio to previous years, we see that the financial leverage ratio was highest in 2022 at 5.38 and has been decreasing since then. This downward trend is generally positive as it shows a decreasing reliance on debt financing over time. The ratio was lowest in 2019 at 3.40, demonstrating a historically lower level of financial risk and debt in the company's capital structure.
Overall, the decreasing trend in the financial leverage ratio for Union Pacific Corp. over the last five years indicates a prudent approach to managing debt levels and suggests a more conservative capital structure. It is important for investors and stakeholders to monitor this ratio to assess the company's ability to meet its financial obligations and manage its debt effectively.
Peer comparison
Dec 31, 2023