Valaris Ltd (VAL)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 4,322,200 | 2,860,300 | 12,873,200 | 16,931,200 | 14,023,700 |
| Total stockholders’ equity | US$ in thousands | 1,987,600 | 1,289,900 | 4,374,600 | 9,310,900 | 8,091,400 |
| Financial leverage ratio | 2.17 | 2.22 | 2.94 | 1.82 | 1.73 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $4,322,200K ÷ $1,987,600K
= 2.17
The financial leverage ratio for Valaris Ltd has been gradually decreasing from 2.47 in 2021 to 2.22 in 2022 and further to 2.17 in 2023. This indicates that the company has been reducing its reliance on debt to finance its operations over the years. A lower financial leverage ratio implies a lower level of debt relative to equity, which can be seen as a positive indication of the company's financial health and stability. By decreasing its financial leverage ratio, Valaris Ltd may be reducing its financial risk and improving its ability to weather economic downturns or changes in the industry. Overall, the decreasing trend in the financial leverage ratio suggests a cautious approach to managing the company's capital structure.
Peer comparison
Dec 31, 2023