Xerox Corp (XRX)
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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 8,365,000 | 8,322,000 | 9,491,000 | 9,944,000 | 10,008,000 | 10,444,000 | 10,569,000 | 11,046,000 | 11,543,000 | 11,420,000 | 12,270,000 | 13,082,000 | 13,223,000 | 14,081,000 | 14,110,000 | 14,272,000 | 14,741,000 | 15,352,000 | 14,125,000 |
| Total stockholders’ equity | US$ in thousands | 1,076,000 | 1,303,000 | 2,361,000 | 2,378,000 | 2,538,000 | 2,789,000 | 3,384,000 | 3,459,000 | 3,343,000 | 3,243,000 | 3,873,000 | 4,184,000 | 4,436,000 | 5,188,000 | 5,287,000 | 5,425,000 | 5,592,000 | 5,448,000 | 5,477,000 |
| Financial leverage ratio | 7.77 | 6.39 | 4.02 | 4.18 | 3.94 | 3.74 | 3.12 | 3.19 | 3.45 | 3.52 | 3.17 | 3.13 | 2.98 | 2.71 | 2.67 | 2.63 | 2.64 | 2.82 | 2.58 |
December 31, 2024 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $8,365,000K ÷ $1,076,000K
= 7.77
The financial leverage ratio of Xerox Corp has shown a gradual increase over the periods, indicating an increasing level of financial leverage. The ratio was relatively stable around 2.5 to 2.8 from June 2020 to March 2022. However, from June 2022 onwards, there was a notable uptrend in the leverage ratio reaching 7.77 by December 2024.
This upward trend suggests that Xerox Corp has been relying more on debt financing to support its operations and investments. A higher financial leverage ratio implies a higher proportion of debt in the company's capital structure compared to equity. While debt can provide tax benefits and amplify returns, it also increases financial risk due to interest payments and potential solvency issues, especially during economic downturns.
It is essential for investors and stakeholders to monitor Xerox Corp's financial leverage ratio closely, as a significant increase in leverage could signal heightened financial risk and potentially impact the company's creditworthiness and overall financial stability.
Peer comparison
Dec 31, 2024