Vestis Corporation (VSTS)
Financial leverage ratio
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | ||
|---|---|---|---|---|---|
| Total assets | US$ in thousands | 3,157,120 | 3,133,010 | 3,108,380 | — |
| Total stockholders’ equity | US$ in thousands | 877,360 | 2,335,810 | 2,331,980 | — |
| Financial leverage ratio | 3.60 | 1.34 | 1.33 | — |
September 30, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $3,157,120K ÷ $877,360K
= 3.60
The financial leverage ratio of Vestis Corporation has increased significantly over the years, reaching 3.60 as of September 30, 2023, compared to 1.34 in 2022 and 1.33 in 2021. This indicates that the company has been relying more on debt financing to support its operations and growth. A higher financial leverage ratio can amplify returns on equity when business is booming, but it also increases the risk of financial distress in times of economic uncertainty or downturns. It is important for Vestis Corporation to carefully manage its debt levels and ensure a balance between debt and equity financing to maintain financial stability and sustainable growth.
Peer comparison
Sep 30, 2023