Cactus Inc (WHD)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 1,522,560 | 1,118,900 | 982,078 | 815,594 | 834,964 |
| Total stockholders’ equity | US$ in thousands | 865,522 | 571,917 | 468,644 | 352,970 | 327,466 |
| Financial leverage ratio | 1.76 | 1.96 | 2.10 | 2.31 | 2.55 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $1,522,560K ÷ $865,522K
= 1.76
The financial leverage ratio of Cactus Inc has been steadily decreasing over the past five years, indicating a trend of decreasing reliance on debt to finance the company's operations and growth. The ratio decreased from 2.55 in 2019 to 1.76 in 2023, reflecting a reduction in the company's debt levels relative to its equity.
A lower financial leverage ratio suggests that Cactus Inc has been gradually improving its financial stability and reducing the risk associated with its capital structure. This may be a positive sign for investors and creditors as it indicates a lower probability of financial distress and default.
Overall, the decreasing trend in the financial leverage ratio for Cactus Inc signifies a strengthening of the company's balance sheet and a shift towards a more conservative financial position. It suggests that the company is becoming less dependent on external financing and is managing its debt levels more prudently, which could enhance its long-term sustainability and resilience in volatile market conditions.
Peer comparison
Dec 31, 2023