United Rentals Inc (URI)
Financial leverage ratio
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 28,163,000 | 25,589,000 | 24,183,000 | 20,292,000 | 17,868,000 |
| Total stockholders’ equity | US$ in thousands | 8,622,000 | 8,130,000 | 7,062,000 | 5,991,000 | 4,545,000 |
| Financial leverage ratio | 3.27 | 3.15 | 3.42 | 3.39 | 3.93 |
December 31, 2024 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $28,163,000K ÷ $8,622,000K
= 3.27
The financial leverage ratio of United Rentals Inc has shown a fluctuating trend over the past five years. Starting at 3.93 in December 31, 2020, the ratio decreased to 3.39 by December 31, 2021, before slightly increasing to 3.42 by December 31, 2022. Subsequently, the ratio decreased to 3.15 by December 31, 2023, and then rose again to 3.27 by December 31, 2024.
The financial leverage ratio measures the extent to which the company relies on debt financing versus equity. A higher ratio indicates that a company is more reliant on debt to fund its operations and growth, potentially increasing financial risk. Conversely, a lower ratio signifies a lower reliance on debt and a stronger financial position.
In the case of United Rentals Inc, the decreasing trend from 2020 to 2023 suggests a shift towards a lower reliance on debt financing, which could be viewed positively by investors and creditors. However, the slight increase in the ratio in 2024 warrants attention as it may indicate a reversal of this trend. Monitoring the financial leverage ratio over time can provide insights into the company's capital structure and financial risk management strategies.
Peer comparison
Dec 31, 2024