Advanced Drainage Systems Inc (WMS)
Financial leverage ratio
| Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 3,268,910 | 3,161,960 | 3,137,970 | 3,048,670 | 2,901,120 | 3,005,660 | 3,177,600 | 3,225,360 | 2,649,760 | 2,555,760 | 2,506,620 | 2,474,620 | 2,413,830 | 2,342,440 | 2,373,370 | 2,415,030 | 2,369,890 | 2,249,180 | 2,295,320 | 1,068,420 |
| Total stockholders’ equity | US$ in thousands | 1,153,310 | 1,078,560 | 1,029,410 | 944,672 | 824,147 | 940,998 | 1,038,410 | 989,996 | 893,039 | 799,399 | 695,219 | 791,779 | 819,784 | 772,205 | 696,520 | 602,306 | 525,723 | 531,422 | 498,178 | 199,126 |
| Financial leverage ratio | 2.83 | 2.93 | 3.05 | 3.23 | 3.52 | 3.19 | 3.06 | 3.26 | 2.97 | 3.20 | 3.61 | 3.13 | 2.94 | 3.03 | 3.41 | 4.01 | 4.51 | 4.23 | 4.61 | 5.37 |
March 31, 2024 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $3,268,910K ÷ $1,153,310K
= 2.83
The financial leverage ratio of Advanced Drainage Systems Inc has shown some fluctuations over the past few quarters. The ratio has ranged from 2.83 to 5.37, indicating changes in the company's financial structure and risk profile.
A higher financial leverage ratio suggests that the company relies more on debt financing, which can amplify returns in good times but also increase financial risk during downturns. Conversely, a lower ratio indicates a more conservative capital structure with less reliance on debt.
The company's financial leverage ratio peaked at 5.37 in the fourth quarter of 2019, which could indicate increased leverage and potentially higher financial risk at that time. Since then, the ratio has fluctuated, showing a downward trend from late 2019 to early 2020 before picking up again and fluctuating between 3.00 and 4.50 in more recent quarters.
It is important for stakeholders to monitor the financial leverage ratio of Advanced Drainage Systems Inc closely to assess the company's financial risk and stability, as changes in this ratio can impact the company's ability to meet its financial obligations and pursue growth opportunities.