HALLIBURTON CO 10-K form for the fiscal year ended 2023-12-31, page 45: 

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|  1 | HALLIBURTON COMPANY Consolidated Balance Sheets                                                  |                                                 |             |         |    |        |
|  2 |                                                                                                  |                                                 | December 31 |         |    |        |
|  3 | Millions of dollars and shares except per share data                                             | 2023                                            | 2022        |         |    |        |
|  4 | Assets                                                                                           |                                                 |             |         |    |        |
|  5 | Current assets:                                                                                  |                                                 |             |         |    |        |
|  6 | Cash and equivalents                                                                             | $                                               | 2,264       |         | $  | 2,346  |
|  7 | Receivables (net of allowances for credit losses of $742 and $731)                               | 4,860                                           |             | 4,627   |    |        |
|  8 | Inventories                                                                                      | 3,226                                           |             | 2,923   |    |        |
| 11 | Other current assets                                                                             | 1,193                                           |             | 1,056   |    |        |
| 12 | Total current assets                                                                             | 11,543                                          |             | 10,952  |    |        |
| 13 | Property, plant, and equipment (net of accumulated depreciation of $12,064 and $11,660)          | 4,900                                           |             | 4,348   |    |        |
| 14 | Goodwill                                                                                         | 2,850                                           |             | 2,829   |    |        |
| 15 | Deferred income taxes                                                                            | 2,505                                           |             | 2,636   |    |        |
| 16 | Operating lease right-of-use assets                                                              | 1,088                                           |             | 913     |    |        |
| 17 | Other assets                                                                                     | 1,797                                           |             | 1,577   |    |        |
| 18 | Total assets                                                                                     | $                                               | 24,683      |         | $  | 23,255 |
| 19 | Liabilities and Shareholders' Equity                                                             |                                                 |             |         |    |        |
| 20 | Current liabilities:                                                                             |                                                 |             |         |    |        |
| 21 | Accounts payable                                                                                 | $                                               | 3,147       |         | $  | 3,121  |
| 22 | Accrued employee compensation and benefits                                                       | 689                                             |             | 634     |    |        |
| 23 | Income taxes payable                                                                             | 390                                             |             | 294     |    |        |
| 24 | Taxes other than income                                                                          | 370                                             |             | 349     |    |        |
| 25 | Current portion of operating lease liabilities                                                   | 262                                             |             | 224     |    |        |
| 28 | Other current liabilities                                                                        | 750                                             |             | 723     |    |        |
| 29 | Total current liabilities                                                                        | 5,608                                           |             | 5,345   |    |        |
| 30 | Long-term debt                                                                                   | 7,636                                           |             | 7,928   |    |        |
| 31 | Operating lease liabilities                                                                      | 911                                             |             | 791     |    |        |
| 32 | Employee compensation and benefits                                                               | 408                                             |             | 408     |    |        |
| 33 | Other liabilities                                                                                | 687                                             |             | 806     |    |        |
| 34 | Total liabilities                                                                                | 15,250                                          |             | 15,278  |    |        |
| 35 | Shareholders' equity:                                                                            |                                                 |             |         |    |        |
| 36 | Common stock, par value $2.50 per share (authorized 2,000 shares, issued 1,065 and 1,066 shares) | 2,663                                           |             | 2,664   |    |        |
| 37 | Paid-in capital in excess of par value                                                           | 63                                              |             | 50      |    |        |
| 38 | Accumulated other comprehensive loss                                                             | (331)                                           |             | (230)   |    |        |
| 39 | Retained earnings                                                                                | 12,536                                          |             | 10,572  |    |        |
| 40 | Treasury stock, at cost (176 and 164 shares)                                                     | (5,540)                                         |             | (5,108) |    |        |
| 41 | Company shareholders' equity                                                                     | 9,391                                           |             | 7,948   |    |        |
| 42 | Noncontrolling interest in consolidated subsidiaries                                             | 42                                              |             | 29      |    |        |
| 43 | Total shareholders' equity                                                                       | 9,433                                           |             | 7,977   |    |        |
| 44 | Total liabilities and shareholders' equity                                                       | $                                               | 24,683      |         | $  | 23,255 |
| 45 |                                                                                                  | See notes to consolidated financial statements. |             |         |    |        |

HAL 2023 FORM 10-K | 45







Question: What does the Financial Leverage Ratio for Halliburton in 2023 indicate about its use of debt relative to equity?
Answer: The Financial Leverage Ratio is calculated by dividing Total Assets by Shareholders' Equity. For Halliburton in 2023, the Total Assets are $24,683 million, and the Shareholders' Equity is $9,433 million.

Financial Leverage Ratio = Total Assets / Shareholders' Equity = $24,683 million / $9,433 million ≈ 2.62

A Financial Leverage Ratio of 2.62 indicates that Halliburton uses $2.62 in assets for every $1 of equity. This ratio suggests that the company is leveraging its equity to acquire more assets, which can potentially enhance returns on equity. However, it also implies a higher level of debt, which can increase financial risk. A higher financial leverage ratio can be beneficial if the company generates sufficient returns on its assets to cover the cost of debt. Conversely, it can be risky if the returns on assets are insufficient, leading to potential financial distress.