Williams-Sonoma Inc (WSM)
Financial leverage ratio
| Jan 28, 2024 | Oct 29, 2023 | Jul 30, 2023 | Apr 30, 2023 | Jan 29, 2023 | Oct 30, 2022 | Jul 31, 2022 | May 1, 2022 | Jan 30, 2022 | Oct 31, 2021 | Aug 1, 2021 | May 2, 2021 | Jan 31, 2021 | Nov 1, 2020 | Aug 2, 2020 | May 3, 2020 | Feb 2, 2020 | Nov 3, 2019 | Aug 4, 2019 | May 5, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 5,273,550 | 4,883,770 | 4,571,810 | 4,471,040 | 4,663,020 | 4,594,010 | 4,319,170 | 4,210,710 | 4,625,620 | 4,477,320 | 4,245,040 | 4,110,240 | 4,661,420 | 4,310,680 | 4,487,300 | 4,418,120 | 4,054,040 | 3,963,820 | 3,869,680 | 3,788,360 |
| Total stockholders’ equity | US$ in thousands | 2,127,860 | 1,813,230 | 1,620,960 | 1,466,820 | 1,701,050 | 1,412,930 | 1,278,280 | 1,309,740 | 1,664,210 | 1,543,370 | 1,526,720 | 1,447,300 | 1,651,180 | 1,401,900 | 1,332,920 | 1,218,930 | 1,235,860 | 1,131,890 | 1,121,600 | 1,121,770 |
| Financial leverage ratio | 2.48 | 2.69 | 2.82 | 3.05 | 2.74 | 3.25 | 3.38 | 3.21 | 2.78 | 2.90 | 2.78 | 2.84 | 2.82 | 3.07 | 3.37 | 3.62 | 3.28 | 3.50 | 3.45 | 3.38 |
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 fluctuated over the past few quarters, indicating changes in the company's capital structure and its ability to meet its financial obligations. The trend shows an increase in leverage from early 2020 through mid-2021, with the ratio peaking at 3.62 in August 2020. Subsequently, there was a slight decrease in leverage until mid-2022, followed by a steady increase reaching 3.38 in January 2023 and remaining relatively stable around that level.
A financial leverage ratio above 1 indicates that the company is relying more on debt to finance its operations rather than equity. A ratio of 2.48 as of January 2024 implies that for every $1 of equity, Williams-Sonoma Inc has $2.48 of debt. An increasing trend in the leverage ratio may suggest a higher financial risk as the company becomes more leveraged, potentially leading to higher interest payments and a greater vulnerability to economic downturns.
It is important for investors and stakeholders to closely monitor the financial leverage ratio of Williams-Sonoma Inc to assess the company's risk profile and financial health. Additional analysis of the company's debt levels, interest coverage ratio, and overall profitability should be considered alongside the financial leverage ratio to gain a comprehensive understanding of its financial position.