Waste Management Inc (WM)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 32,823,000 | 31,367,000 | 29,097,000 | 29,345,000 | 27,743,000 |
| Total stockholders’ equity | US$ in thousands | 6,903,000 | 6,849,000 | 7,124,000 | 7,452,000 | 7,068,000 |
| Financial leverage ratio | 4.75 | 4.58 | 4.08 | 3.94 | 3.93 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $32,823,000K ÷ $6,903,000K
= 4.75
The financial leverage ratio of Waste Management, Inc. has shown a generally increasing trend over the past five years, indicating an escalation in the company's reliance on debt to finance its operations and investments. The ratio has grown from 3.93 in 2019 to 4.75 in 2023.
This increasing trend in the financial leverage ratio may suggest that Waste Management, Inc. is taking on more debt relative to its equity, potentially increasing financial risk. While higher leverage can amplify returns during periods of growth, it also amplifies losses in downturns.
It is important for stakeholders to closely monitor the company's ability to service its debt obligations and manage its leverage levels effectively to ensure financial stability and sustainability in the long term.
Peer comparison
Dec 31, 2023