WD-40 Company (WDFC)
Financial leverage ratio
| Aug 31, 2024 | Aug 31, 2023 | Aug 31, 2022 | Aug 31, 2021 | Aug 31, 2020 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 449,039 | 437,966 | 434,295 | 430,203 | 362,637 |
| Total stockholders’ equity | US$ in thousands | 230,526 | 210,178 | 188,624 | 200,382 | 160,313 |
| Financial leverage ratio | 1.95 | 2.08 | 2.30 | 2.15 | 2.26 |
August 31, 2024 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $449,039K ÷ $230,526K
= 1.95
The financial leverage ratio of WD-40 Company has fluctuated over the past five years, ranging from a low of 2.08 in August 2023 to a high of 2.30 in August 2022. A higher financial leverage ratio indicates that the company is relying more on debt to finance its operations and growth, which can increase the risk for the company during economic downturns or times of financial distress. Conversely, a lower ratio suggests a lesser reliance on debt financing.
In August 2024, the financial leverage ratio decreased slightly to 1.95, indicating a reduction in the company's reliance on debt compared to the previous year. This could be a positive sign, suggesting that WD-40 Company may be managing its debt levels more prudently or generating sufficient cash flows to support its operations without taking on excessive debt.
Overall, monitoring the trend of the financial leverage ratio is important for investors and stakeholders to assess the company's capital structure and financial risk. It is essential for WD-40 Company to strike a balance between utilizing debt for growth opportunities while ensuring the company's overall financial stability and solvency.
Peer comparison
Aug 31, 2024