Xerox Corp (XRX)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 10,008,000 | 11,543,000 | 13,223,000 | 14,741,000 | 15,047,000 |
| Total stockholders’ equity | US$ in thousands | 2,538,000 | 3,343,000 | 4,436,000 | 5,592,000 | 5,587,000 |
| Financial leverage ratio | 3.94 | 3.45 | 2.98 | 2.64 | 2.69 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $10,008,000K ÷ $2,538,000K
= 3.94
The financial leverage ratio of Xerox Holdings Corp has shown an increasing trend over the past five years, from 2.59 in 2019 to 3.64 in 2023. This indicates a greater reliance on debt financing compared to equity financing.
The rising trend in the financial leverage ratio may suggest that Xerox is taking on more debt to support its operations or growth initiatives. While higher leverage can amplify returns when business is strong, it also increases the company's financial risk, especially in times of economic uncertainty or downturns.
Investors and creditors should closely monitor Xerox's financial leverage ratio to assess its ability to meet debt obligations and manage financial risks effectively. It is important for Xerox to strike a balance between debt and equity financing to maintain financial stability and sustainability in the long run.
Peer comparison
Dec 31, 2023