Watsco Inc (WSO)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 3,729,180 | 3,488,210 | 3,085,860 | 2,484,350 | 2,556,160 |
| Total stockholders’ equity | US$ in thousands | 2,229,840 | 1,889,240 | 1,664,950 | 1,486,680 | 1,435,430 |
| Financial leverage ratio | 1.67 | 1.85 | 1.85 | 1.67 | 1.78 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $3,729,180K ÷ $2,229,840K
= 1.67
The financial leverage ratio of Watsco Inc. has fluctuated over the past five years. In 2023, the financial leverage ratio decreased to 1.67 from 1.85 in 2022 and 1.85 in 2021. This indicates that the company relied less on debt to finance its operations and investments in 2023 compared to the prior two years. However, the ratio was similar to the level seen in 2020, when it was also 1.67.
In 2019, the financial leverage ratio was slightly higher at 1.78 compared to 2023. Overall, the trend suggests that Watsco Inc. has been managing its financial leverage effectively, with a recent decrease indicating a potential shift towards a more conservative debt structure in 2023.