The Wendy’s Co (WEN)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 5,182,830 | 5,499,340 | 5,101,390 | 5,040,010 | 4,994,530 |
| Total stockholders’ equity | US$ in thousands | 309,779 | 465,720 | 436,405 | 549,596 | 516,359 |
| Financial leverage ratio | 16.73 | 11.81 | 11.69 | 9.17 | 9.67 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $5,182,830K ÷ $309,779K
= 16.73
The financial leverage ratio of Wendy's Co has shown an increasing trend over the past five years. It was 9.67 in 2019, increased to 9.17 in 2021, and further rose to 16.73 in 2023. This indicates that the company's reliance on debt to finance its operations and growth has significantly increased over the years. A higher financial leverage ratio suggests higher financial risk as the company has more debt in its capital structure compared to equity. It also indicates that a larger portion of the company's assets is funded by debt, which can lead to higher interest expenses and lower financial flexibility. It is essential for stakeholders to closely monitor this trend and assess the company's ability to manage and service its increasing debt levels effectively.
Peer comparison
Dec 31, 2023