WESCO International Inc (WCC)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 15,060,900 | 14,811,700 | 12,617,700 | 11,880,200 | 5,017,640 |
| Total stockholders’ equity | US$ in thousands | 5,037,100 | 4,454,200 | 3,782,520 | 3,343,720 | 2,265,480 |
| Financial leverage ratio | 2.99 | 3.33 | 3.34 | 3.55 | 2.21 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $15,060,900K ÷ $5,037,100K
= 2.99
The financial leverage ratio of Wesco International, Inc. has fluctuated over the past five years. In 2023, the ratio stands at 2.99, showing a decrease from 3.33 in 2022. This decline suggests that the company has reduced its reliance on debt to finance its operations compared to the previous year. However, it is still higher than the ratios reported in 2021 and 2020, which were 3.34 and 3.55, respectively.
The significant decrease in the financial leverage ratio in 2020 may indicate a shift towards a less leveraged capital structure during that period. On the other hand, the ratio spiked in 2022, reflecting a potential increase in debt utilization for funding activities. The ratio in 2019 was notably lower at 2.21, indicating a more conservative approach to debt management that year.
Overall, a decreasing trend in the financial leverage ratio may signify improved financial stability and reduced financial risk for Wesco International, Inc. However, it is essential to monitor the ratio closely to ensure that the company maintains an optimal balance between debt and equity to support its growth and profitability in the long term.
Peer comparison
Dec 31, 2023