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', KAI's financial leverage was 2.01, indicating how much debt is used to finance assets. Industry average for Industrial Machinery/Components in '2021' stood at 1.68.
• In '2022', KAI's financial leverage was 1.87, indicating how much debt is used to finance assets. The decrease since '2021' reflects improving financial health. Industry average for Industrial Machinery/Components in '2022' stood at 1.79. Industry average increased by 0.11 compared to previous year.
• In '2023', KAI's financial leverage was 1.63, indicating how much debt is used to finance assets. The decrease since '2022' reflects improving financial health. Industry average for Industrial Machinery/Components in '2023' stood at 1.94. Industry average increased by 0.16 compared to previous year.
• In '2024', KAI's financial leverage was 1.61, indicating how much debt is used to finance assets. The decrease since '2023' reflects improving financial health. Industry average for Industrial Machinery/Components in '2024' stood at 2.09. Industry average increased by 0.15 compared to previous year.
Overall, KAI'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.