Wabash National Corporation (WNC)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 1,362,810 | 1,203,520 | 1,107,070 | 1,161,470 | 1,304,590 |
| Total stockholders’ equity | US$ in thousands | 549,496 | 397,613 | 325,539 | 404,879 | 520,988 |
| Financial leverage ratio | 2.48 | 3.03 | 3.40 | 2.87 | 2.50 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $1,362,810K ÷ $549,496K
= 2.48
The financial leverage ratio of Wabash National Corp. has demonstrated fluctuations over the past five years. The ratio indicates the extent to which the company's operations are funded by debt relative to equity. A higher financial leverage ratio suggests a greater reliance on debt financing, which can amplify returns but also increase financial risk.
In 2023, the financial leverage ratio stood at 2.48, indicating a decrease from the previous year. This implies that the company relied less on debt to finance its operations compared to 2022. The reduction in the ratio could be interpreted positively as it may reflect a stronger financial position and decreased risk associated with debt obligations.
In 2022, the financial leverage ratio was 3.03, representing a significant increase from 2021. This substantial rise suggests a higher level of debt utilization to support the company's assets and operations. It may indicate a strategic decision to leverage debt for growth or acquisitions but also raises concerns about the company's ability to meet debt obligations.
In 2021 and 2020, the financial leverage ratio continued to increase, reaching 3.40 and 2.87, respectively. These elevated levels imply a heightened reliance on debt financing, potentially indicating aggressive expansion strategies or financial challenges. The sustained increase in the ratio over these years may raise concerns about the company's debt management and financial stability.
In 2019, the financial leverage ratio was 2.50, indicating a moderate level of debt usage relative to equity. This ratio suggests a balanced approach to financing between debt and equity, providing a reasonable level of financial risk and stability.
Overall, the analysis of Wabash National Corp.'s financial leverage ratio over the past five years indicates fluctuations in the company's debt utilization and financial risk profile. It is essential for investors and stakeholders to monitor these trends to assess the company's capital structure and financial health effectively.