Williams-Sonoma Inc (WSM)
Financial leverage ratio
| Jan 28, 2024 | Jan 29, 2023 | Jan 30, 2022 | Jan 31, 2021 | Feb 2, 2020 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 5,273,550 | 4,663,020 | 4,625,620 | 4,661,420 | 4,054,040 |
| Total stockholders’ equity | US$ in thousands | 2,127,860 | 1,701,050 | 1,664,210 | 1,651,180 | 1,235,860 |
| Financial leverage ratio | 2.48 | 2.74 | 2.78 | 2.82 | 3.28 |
January 28, 2024 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $5,273,550K ÷ $2,127,860K
= 2.48
The financial leverage ratio of Williams-Sonoma Inc has been gradually decreasing over the past five years, indicating a decreasing reliance on debt financing in relation to equity. As of January 28, 2024, the financial leverage ratio stands at 2.48, which suggests that the company's debt levels have decreased compared to the prior years. This reduction in the financial leverage ratio may indicate improved financial stability and reduced financial risk for the company. However, it should be noted that the ratio is still above 2, which implies that the company is using a moderate amount of debt to finance its operations. Overall, the decreasing trend in the financial leverage ratio of Williams-Sonoma Inc reflects a more conservative approach to capital structure management.