Waters Corporation (WAT)

Financial leverage ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Total assets	US$ in thousands	4,626,850	3,281,450	3,094,930	2,839,920	2,557,060
Total stockholders’ equity	US$ in thousands	1,150,340	504,488	367,554	232,144	-216,281
Financial leverage ratio		4.02	6.50	8.42	12.23	—

December 31, 2023 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $4,626,850K ÷ $1,150,340K
= 4.02

The financial leverage ratio of Waters Corp. has shown a decreasing trend over the past five years, decreasing from 12.23 in 2020 to 4.02 in 2023. This indicates that the company has been using less debt to finance its operations relative to its equity. A lower financial leverage ratio suggests a lower degree of financial risk and potential for financial distress, as the company is relying more on equity financing rather than debt. This can lead to increased solvency and stability for the company. However, it is also important to consider the optimal capital structure for the company, balancing the benefits of debt financing such as tax advantages and potential higher returns on equity with the risks associated with high debt levels.