Borgwarner(Bwa) Financials: Equity Multiplier Compared To Industry Average, Plus Other Key Ratios
Solvency Trend (Last 5 Years)
Solvency - equity multiplier
This chart shows the historical trend of equity multiplier for BWA compared to its industry average over the recent years.
Ratio Definition and Interpretation
Name: Equity Multiplier
Definition: The equity multiplier shows how much total assets the company controls for every dollar invested by shareholders. It reflects how much debt is being used to stretch owners’ equity. A higher multiplier means greater use of debt to amplify returns — but also amplifies risk if things go wrong. Lower multipliers suggest a safer, more self-funded business.
Interpretation:
• In '2021', BWA's equity multiplier was 2.39, representing the level of financial leverage utilized. Industry average for Auto Parts:O.E.M. in '2021' stood at 2.38.
• In '2022', BWA's equity multiplier was 2.35, representing the level of financial leverage utilized. The decrease since '2021' reflects improving financial health. Industry average for Auto Parts:O.E.M. in '2022' stood at 2.59. Industry average increased by 0.22 compared to previous year.
• In '2023', BWA's equity multiplier was 2.48, representing the level of financial leverage utilized. The increase compared to '2022' may signal growing financial pressure. Industry average for Auto Parts:O.E.M. in '2023' stood at 2.36. Industry average declined by 0.23 from previous year.
• In '2024', BWA's equity multiplier was 2.53, representing the level of financial leverage utilized. The increase compared to '2023' may signal growing financial pressure. Industry average for Auto Parts:O.E.M. in '2024' stood at 2.40. Industry average increased by 0.04 compared to previous year.
Overall, BWA's equity multiplier has steadily improved over the past 4 years.
Formula: Equity Multiplier = Total Assets / Shareholders' Equity
Good Range: Usually ranges from 1.5 to 3 depending on industry.