Park Hotels & Resorts(Pk) 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 PK 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', PK's financial leverage was 2.19, indicating how much debt is used to finance assets. Industry average for Hotels/Resorts in '2021' stood at 2.89.
• In '2022', PK's financial leverage was 2.22, indicating how much debt is used to finance assets. The increase compared to '2021' may signal growing financial pressure. Industry average for Hotels/Resorts in '2022' stood at 3.00. Industry average increased by 0.11 compared to previous year.
• In '2023', PK's financial leverage was 2.35, indicating how much debt is used to finance assets. The increase compared to '2022' may signal growing financial pressure. Industry average for Hotels/Resorts in '2023' stood at 2.05. Industry average declined by 0.94 from previous year.
• In '2024', PK's financial leverage was 2.49, indicating how much debt is used to finance assets. The increase compared to '2023' may signal growing financial pressure. Industry average for Hotels/Resorts in '2024' stood at 1.86. Industry average declined by 0.19 from previous year.
Overall, PK's financial leverage has steadily improved 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.