Xylem Inc (XYL)
Financial leverage ratio
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 16,112,000 | 15,905,000 | 16,097,000 | 7,940,000 | 7,952,000 | 8,106,000 | 8,189,000 | 8,219,000 | 8,276,000 | 8,151,000 | 8,785,000 | 8,545,000 | 8,750,000 | 8,448,000 | 8,444,000 | 7,591,000 | 7,710,000 | 7,515,000 | 7,674,000 | 7,468,000 |
| Total stockholders’ equity | US$ in thousands | 10,166,000 | 9,930,000 | 9,899,000 | 3,578,000 | 3,494,000 | 3,215,000 | 3,195,000 | 3,198,000 | 3,218,000 | 3,093,000 | 3,040,000 | 2,937,000 | 2,968,000 | 2,867,000 | 2,856,000 | 2,812,000 | 2,957,000 | 2,886,000 | 2,894,000 | 2,796,000 |
| Financial leverage ratio | 1.58 | 1.60 | 1.63 | 2.22 | 2.28 | 2.52 | 2.56 | 2.57 | 2.57 | 2.64 | 2.89 | 2.91 | 2.95 | 2.95 | 2.96 | 2.70 | 2.61 | 2.60 | 2.65 | 2.67 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $16,112,000K ÷ $10,166,000K
= 1.58
The financial leverage ratio measures the extent to which a company relies on debt to finance its operations and growth. A higher financial leverage ratio indicates that a company has a higher level of debt relative to its equity.
Looking at the data provided for Xylem Inc, we can see a fluctuation in the financial leverage ratio over the past eight quarters. The ratio decreased from 2.28 in Q4 2022 to 1.58 in Q4 2023, suggesting a reduction in the company's reliance on debt during this period.
However, the financial leverage ratio then increased gradually in the following quarters, reaching 1.63 in Q2 2023 and peaking at 2.22 in Q1 2023. This increase indicates that Xylem Inc may have taken on more debt relative to equity in these quarters, potentially to fund investments or operations.
It is important to note that a high financial leverage ratio can indicate a higher financial risk for the company, as it may face challenges in repaying its debt obligations, especially in times of economic uncertainty. Therefore, Xylem Inc's management should carefully monitor and manage its financial leverage ratio to ensure it remains at a sustainable level.
Peer comparison
Dec 31, 2023