Watsco Inc (WSO)
Financial leverage ratio
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 4,479,520 | 4,517,480 | 4,395,320 | 4,357,120 | 3,779,720 | 4,039,070 | 4,103,010 | 3,800,610 | 3,488,210 | 3,584,590 | 3,788,590 | 3,473,890 | 3,085,860 | 3,090,920 | 3,131,680 | 2,692,260 | 2,496,920 | 2,647,680 | 2,636,730 | 2,581,830 |
| Total stockholders’ equity | US$ in thousands | 4,479,520 | 2,696,380 | 2,610,840 | 2,526,420 | 2,229,840 | 2,224,010 | 2,037,650 | 1,928,870 | 1,889,240 | 1,908,780 | 1,834,440 | 1,725,210 | 1,664,950 | 1,644,580 | 1,575,700 | 1,491,410 | 1,486,680 | 1,489,610 | 1,437,040 | 1,404,340 |
| Financial leverage ratio | 1.00 | 1.68 | 1.68 | 1.72 | 1.70 | 1.82 | 2.01 | 1.97 | 1.85 | 1.88 | 2.07 | 2.01 | 1.85 | 1.88 | 1.99 | 1.81 | 1.68 | 1.78 | 1.83 | 1.84 |
December 31, 2024 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $4,479,520K ÷ $4,479,520K
= 1.00
The financial leverage ratio of Watsco Inc has fluctuated over the past five years, ranging from a low of 1.00 in December 31, 2024 to a high of 2.07 in June 30, 2022. Generally, a lower financial leverage ratio indicates a lower level of debt relative to equity, suggesting a lower financial risk for the company. On the other hand, a higher financial leverage ratio indicates a higher level of debt relative to equity, which can potentially magnify returns for shareholders but also increase financial risk.
Watsco Inc's financial leverage ratio has shown some variability, with the ratio peaking in June 30, 2022 before declining slightly. The company's ratio has generally remained above 1.5, indicating a moderate level of financial leverage and potential risk. Investors and stakeholders should monitor this ratio closely to assess the company's ability to meet its debt obligations and manage its capital structure effectively.