Vestis Corporation (VSTS)
Financial leverage ratio
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | ||
|---|---|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 3,161,750 | 3,157,120 | 3,169,800 | 3,176,540 | — | 3,133,010 | — |
| Total stockholders’ equity | US$ in thousands | 904,158 | 877,360 | 913,757 | 904,989 | 2,335,810 | 2,335,810 | — |
| Financial leverage ratio | 3.50 | 3.60 | 3.47 | 3.51 | 0.00 | 1.34 | — |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $3,161,750K ÷ $904,158K
= 3.50
The financial leverage ratio for Vestis Corporation has been showing a fluctuating trend over the last few quarters, ranging from 3.47 to 3.60. This ratio indicates that the company is utilizing a significant amount of debt to finance its operations and investments. The sudden drop to 0.00 in the December 2022 quarter followed by a sharp increase to 3.50 in the subsequent quarters suggests a major change in the company's capital structure or financial strategy during that period.
A financial leverage ratio above 1 indicates that the company has more debt than equity in its capital structure, which can amplify returns on equity but also increase financial risk. Vestis Corporation's increasing financial leverage ratio may signify a higher level of risk associated with its debt obligations. It would be important for stakeholders to closely monitor the company's ability to manage its debt levels effectively and sustain its profitability in order to meet its financial obligations.
Peer comparison
Dec 31, 2023