Ducommun(Dco) Financials: Financial Leverage Compared To Industry Average, Plus Other Key Ratios
Solvency Trend (Last 5 Years)
Solvency - financial leverage
This chart shows the historical trend of financial leverage for DCO compared to its industry average over the recent years.
Ratio Definition and Interpretation
Name: Financial Leverage
Definition: Financial leverage tells you how much borrowed money the company uses to boost its size and profits. Using leverage can help a business grow faster, but it also increases pressure if sales slow down. Moderate leverage is common and often healthy. Excessive leverage can be dangerous, especially during tough economic times.
Interpretation:
• In '2021', DCO's financial leverage was 2.06, indicating how much debt is used to finance assets. Industry average for Military/Government/Technical in '2021' stood at 2.28.
• In '2022', DCO's financial leverage was 2.00, indicating how much debt is used to finance assets. The decrease since '2021' reflects improving financial health. Industry average for Military/Government/Technical in '2022' stood at 2.54. Industry average increased by 0.25 compared to previous year.
• In '2023', DCO's financial leverage was 1.84, indicating how much debt is used to finance assets. The decrease since '2022' reflects improving financial health. Industry average for Military/Government/Technical in '2023' stood at 2.68. Industry average increased by 0.14 compared to previous year.
• In '2024', DCO's financial leverage was 1.70, indicating how much debt is used to finance assets. The decrease since '2023' reflects improving financial health. Industry average for Military/Government/Technical in '2024' stood at 1.76. Industry average declined by 0.92 from previous year.
Overall, DCO's financial leverage has consistently declined during the past 4 years.
Formula: Financial Leverage = Average Total Assets / Average Shareholders' Equity
Good Range: 1 to 3 common; above 3 may indicate high leverage risk.