Valmont Industries Inc (VMI)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 3,477,450 | 3,557,000 | 3,447,250 | 2,953,160 | 2,807,220 |
| Total stockholders’ equity | US$ in thousands | 1,354,280 | 1,580,850 | 1,386,850 | 1,182,060 | 1,144,340 |
| Financial leverage ratio | 2.57 | 2.25 | 2.49 | 2.50 | 2.45 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $3,477,450K ÷ $1,354,280K
= 2.57
The financial leverage ratio of Valmont Industries Inc has varied over the past five years, ranging from 2.25 to 2.57. A higher financial leverage ratio indicates that a company is relying more on debt to finance its operations, while a lower ratio suggests a greater reliance on equity.
In 2023, the financial leverage ratio increased to 2.57 compared to the previous year, indicating that the company has taken on more debt relative to equity. This could potentially increase the company's financial risk as higher debt levels come with higher interest payments and obligations.
In contrast, the ratio decreased in 2022 to 2.25, which suggests a lower level of debt relative to equity compared to the previous year. This may signal a more conservative financial strategy with less reliance on borrowing.
Overall, the trend in the financial leverage ratio for Valmont Industries Inc has been somewhat volatile, with fluctuations observed in the past five years. It is essential for the company to carefully manage its debt levels to maintain a healthy balance between debt and equity financing and to minimize financial risks.
Peer comparison
Dec 31, 2023