Marriot Vacations Worldwide (VAC)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 9,680,000 | 9,639,000 | 9,613,000 | 8,898,000 | 9,214,000 |
| Total stockholders’ equity | US$ in thousands | 2,382,000 | 2,496,000 | 2,976,000 | 2,651,000 | 3,019,000 |
| Financial leverage ratio | 4.06 | 3.86 | 3.23 | 3.36 | 3.05 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $9,680,000K ÷ $2,382,000K
= 4.06
Marriott Vacations Worldwide Corp's financial leverage ratio has exhibited an increasing trend from 3.05 in 2019 to 4.06 in 2023. This indicates that the company's reliance on debt to finance its operations and assets has been rising over the years. A higher financial leverage ratio suggests a higher proportion of debt in the company's capital structure compared to equity. This can increase the company's financial risk and volatility, as higher debt levels mean higher interest payments and potential constraints on cash flow for debt service. Investors and creditors may closely monitor this ratio to assess the company's ability to manage its debt obligations and financial health. It is important for the company to maintain a balance between debt and equity financing to ensure sustainable growth and mitigate financial risks.