Westinghouse Air Brake Technologies Corp (WAB)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 18,988,000 | 18,516,000 | 18,454,000 | 18,454,000 | 18,944,200 |
| Total stockholders’ equity | US$ in thousands | 10,487,000 | 10,102,000 | 10,201,000 | 10,123,000 | 9,956,500 |
| Financial leverage ratio | 1.81 | 1.83 | 1.81 | 1.82 | 1.90 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $18,988,000K ÷ $10,487,000K
= 1.81
The financial leverage ratio of Westinghouse Air Brake Technologies Corp has been relatively stable over the past five years, ranging from 1.81 to 1.90. This indicates that the company has been financing its operations and assets primarily through debt rather than equity. A financial leverage ratio above 1 suggests that the company has more debt than equity in its capital structure.
While the company's financial leverage ratio has remained consistent, it is important to note that a higher ratio signifies a higher degree of financial risk due to the increased reliance on debt financing. This can make the company more vulnerable to economic downturns or changes in interest rates.
Overall, Westinghouse Air Brake Technologies Corp's consistent financial leverage ratio suggests a deliberate capital structure strategy that balances the benefits of debt financing with the associated risks. However, close monitoring of the company's debt levels and repayment capabilities is advisable to ensure sustainable financial health in the long term.
Peer comparison
Dec 31, 2023