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', HMN's financial leverage was 7.96, indicating how much debt is used to finance assets. Industry average for Property-Casualty Insurers in '2021' stood at 3.84.
• In '2022', HMN's financial leverage was 9.53, indicating how much debt is used to finance assets. The increase compared to '2021' may signal growing financial pressure. Industry average for Property-Casualty Insurers in '2022' stood at 4.12. Industry average increased by 0.29 compared to previous year.
• In '2023', HMN's financial leverage was 12.03, indicating how much debt is used to finance assets. The increase compared to '2022' may signal growing financial pressure. Industry average for Property-Casualty Insurers in '2023' stood at 4.32. Industry average increased by 0.20 compared to previous year.
• In '2024', HMN's financial leverage was 11.59, indicating how much debt is used to finance assets. The decrease since '2023' reflects improving financial health. Industry average for Property-Casualty Insurers in '2024' stood at 4.31. Industry average declined by 0.01 from previous year.
Overall, HMN's financial leverage has been volatile but showed an upward trend over 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.