Varex Imaging Corp (VREX)
Financial leverage ratio
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 1,249,600 | 1,184,400 | 1,147,500 | 1,139,500 | 1,038,900 |
| Total stockholders’ equity | US$ in thousands | 567,700 | 533,400 | 483,300 | 451,700 | 444,900 |
| Financial leverage ratio | 2.20 | 2.22 | 2.37 | 2.52 | 2.34 |
September 30, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $1,249,600K ÷ $567,700K
= 2.20
The financial leverage ratio of Varex Imaging Corp has exhibited a decreasing trend over the past five years, indicating a decline in the company's reliance on debt to finance its operations. The ratio decreased from 2.34 in 2019 to 2.20 in 2023.
A financial leverage ratio above 1 indicates that the company has more debt than equity in its capital structure. Varex Imaging Corp's ratios above 2 suggest that the company has a higher proportion of debt relative to equity in financing its assets.
The decreasing trend in the financial leverage ratio could be a positive sign, as it indicates that the company may be reducing its debt levels or increasing equity in its capital structure. However, a high financial leverage ratio also means that the company is more exposed to financial risk, as higher debt levels can lead to financial distress in times of economic uncertainty or difficulty generating sufficient cash flows to meet debt obligations.
Overall, Varex Imaging Corp's decreasing financial leverage ratio trend suggests a potential improvement in its capital structure and reduced reliance on debt financing, which may positively impact its financial stability and risk profile in the long run.
Peer comparison
Sep 30, 2023