Visteon Corp (VC)
Financial leverage ratio
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 2,862,000 | 2,727,000 | 2,450,000 | 2,234,000 | 2,271,000 |
| Total stockholders’ equity | US$ in thousands | 1,229,000 | 1,038,000 | 675,000 | 516,000 | 387,000 |
| Financial leverage ratio | 2.33 | 2.63 | 3.63 | 4.33 | 5.87 |
December 31, 2024 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $2,862,000K ÷ $1,229,000K
= 2.33
The financial leverage ratio for Visteon Corp has shown a declining trend over the past five years. As of December 31, 2020, the ratio stood at 5.87, indicating a high level of financial leverage. However, there has been a consistent decrease in the ratio each year, with the ratio dropping to 4.33 by the end of 2021, 3.63 by the end of 2022, 2.63 by the end of 2023, and further decreasing to 2.33 by the end of 2024.
This decreasing trend suggests that Visteon Corp has been reducing its reliance on debt financing and moving towards a more conservative capital structure. A lower financial leverage ratio indicates a lower degree of financial risk and potentially greater financial stability for the company. It also implies that the company may be using more equity to fund its operations rather than relying heavily on debt.
Overall, the declining trend in Visteon Corp's financial leverage ratio reflects a strategic shift towards a more balanced and sustainable capital structure, which could positively impact the company's financial health and long-term stability.
Peer comparison
Dec 31, 2024