Zurn Elkay Water Solutions Corporation (ZWS)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Mar 31, 2020 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 2,667,000 | 2,864,000 | 1,077,700 | 3,627,100 | 3,259,700 |
| Total stockholders’ equity | US$ in thousands | 1,602,800 | 1,615,000 | 126,400 | 1,311,000 | 1,228,600 |
| Financial leverage ratio | 1.66 | 1.77 | 8.53 | 2.77 | 2.65 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $2,667,000K ÷ $1,602,800K
= 1.66
The financial leverage ratio of Zurn Elkay Water Solutions Corporation has experienced fluctuations over the past five years. The ratio was 1.66 as of December 31, 2023, showing a slight decrease from the previous year, where it was 1.77 as of December 31, 2022. However, there was a significant decrease in the ratio from 8.53 as of December 31, 2021, indicating a reduction in financial leverage.
The financial leverage ratio measures the proportion of a company's debt to its equity, with a higher ratio indicating higher financial risk due to increased debt levels. The significant drop in the ratio from 8.53 in 2021 to 1.66 in 2023 suggests that the company has reduced its reliance on debt financing in favor of equity financing, which may indicate a more conservative financial structure.
In comparison to previous years, the financial leverage ratio in 2023 is much closer to the levels seen in 2020 and 2019, which were 2.77 and 2.65, respectively. This indicates that the company may have reverted to a more stable financial leverage position after the substantial decrease in 2021.
Overall, the trend in the financial leverage ratio of Zurn Elkay Water Solutions Corporation suggests a shift towards a more balanced and conservative capital structure over the past five years, potentially reducing financial risk and increasing financial stability.
Peer comparison
Dec 31, 2023