Worthington Industries Inc (WOR)
Financial leverage ratio
| May 31, 2023 | May 31, 2022 | May 31, 2021 | May 31, 2020 | May 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 3,650,920 | 3,643,020 | 3,373,240 | 2,331,520 | 2,510,800 |
| Total stockholders’ equity | US$ in thousands | 1,696,010 | 1,480,750 | 1,398,190 | 820,821 | 831,246 |
| Financial leverage ratio | 2.15 | 2.46 | 2.41 | 2.84 | 3.02 |
May 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $3,650,920K ÷ $1,696,010K
= 2.15
The financial leverage ratio measures the extent to which a company relies on debt to finance its assets. Worthington Enterprises Inc.'s financial leverage ratio has shown a decreasing trend over the five-year period, indicating a reduction in its reliance on debt to finance its operations. This indicates a positive development as lower reliance on debt can lead to lower financial risk and greater financial stability. The decrease in the financial leverage ratio from 3.02 in 2019 to 2.15 in 2023 suggests that the company has improved its balance sheet structure and reduced its financial leverage. It implies that the company has either reduced its debt levels or increased its equity, both of which are favorable for long-term financial health. This trend may indicate improved financial management and strategic decision-making within the organization. Overall, the decreasing trend in Worthington Enterprises Inc.'s financial leverage ratio reflects a positive shift towards a more balanced and sustainable capital structure.
Peer comparison
May 31, 2023