Valvoline Inc (VVV)
Financial leverage ratio
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 2,438,700 | 2,889,900 | 3,416,800 | 3,191,000 | 3,051,000 |
| Total stockholders’ equity | US$ in thousands | 185,600 | 203,200 | 306,600 | 134,500 | -76,000 |
| Financial leverage ratio | 13.14 | 14.22 | 11.14 | 23.72 | — |
September 30, 2024 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $2,438,700K ÷ $185,600K
= 13.14
The financial leverage ratio measures the extent to which a company uses debt to finance its operations and can indicate its level of risk and financial stability. In the case of Valvoline Inc, we observe fluctuating financial leverage ratios over the past five years.
In 2024, the financial leverage ratio stands at 13.14, indicating that the company has decreased its reliance on debt compared to the previous year when the ratio was 14.22. This potentially suggests improved financial health and reduced risk.
In 2023, the financial leverage ratio decreased to 14.22 from 11.14 in 2022, implying that Valvoline Inc increased its debt-to-equity ratio, indicating higher financial risk and leverage.
The financial leverage ratio in 2021 was relatively high at 23.72, suggesting a significant reliance on debt to finance operations, which may raise concerns about the company's financial stability and liquidity position.
It's important to note that in 2020, the financial leverage ratio data is not available. However, based on the trend observed from 2021 to 2023, there appears to have been a significant decrease in the financial leverage ratio, which could indicate a strategic shift towards a more conservative financing approach.
Overall, the fluctuating trend in Valvoline Inc's financial leverage ratio over the years highlights the importance of monitoring debt levels and managing financial risk effectively to ensure sustainable growth and stability in the long term.
Peer comparison
Sep 30, 2024