Universal Corporation (UVV)
Financial leverage ratio
| Mar 31, 2024 | Mar 31, 2023 | Mar 31, 2022 | Mar 31, 2021 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 2,937,240 | 2,639,180 | 2,586,340 | 2,341,920 | 2,120,920 |
| Total stockholders’ equity | US$ in thousands | 1,437,210 | 1,397,090 | 1,340,540 | 1,307,300 | 1,246,660 |
| Financial leverage ratio | 2.04 | 1.89 | 1.93 | 1.79 | 1.70 |
March 31, 2024 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $2,937,240K ÷ $1,437,210K
= 2.04
The financial leverage ratio of Universal Corporation has shown a generally increasing trend over the past five years, indicating a higher level of leverage in the company's capital structure.
The ratio increased from 1.70 in 2020 to 2.04 in 2024, suggesting that Universal Corporation has been relying more on debt to fund its operations and growth. This increasing trend may imply that the company is taking on more financial risk, as a higher financial leverage ratio means a greater proportion of debt in the capital structure compared to equity.
While leverage can amplify returns in favorable market conditions, it also exposes the company to higher interest expense and financial constraints during economic downturns or in times of financial distress. Therefore, investors and stakeholders should closely monitor Universal Corporation's financial leverage ratio and its impact on the company's overall financial health and stability.
Peer comparison
Mar 31, 2024