Apple Inc (AAPL)
Financial leverage ratio
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 352,583,000 | 352,755,000 | 351,002,000 | 323,888,000 | 338,516,000 |
| Total stockholders’ equity | US$ in thousands | 62,146,000 | 50,672,000 | 63,090,000 | 65,339,000 | 90,488,000 |
| Financial leverage ratio | 5.67 | 6.96 | 5.56 | 4.96 | 3.74 |
September 30, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $352,583,000K ÷ $62,146,000K
= 5.67
The financial leverage ratio measures the extent to which a company is using debt to finance its assets. A higher financial leverage ratio indicates a greater reliance on debt to fund operations and expansion, which can potentially increase the company's financial risk.
Apple Inc's financial leverage ratio has shown significant fluctuations over the past five years, ranging from 3.74 in 2019 to 6.96 in 2022. The ratio decreased to 5.56 in 2021 before increasing to 5.67 in 2023.
The upward trend in the financial leverage ratio from 2019 to 2022 suggests that Apple Inc increased its reliance on debt to finance its operations and investments. This could indicate a deliberate strategic decision to take advantage of low-interest rates or to fund ambitious growth plans.
However, the slight decrease in the financial leverage ratio in 2023 may suggest a shift in the company's capital structure, potentially signaling a reduced use of debt or increased equity financing.
It is important to note that while higher leverage can amplify returns on equity in favorable conditions, it also heightens the company's vulnerability to economic downturns and interest rate fluctuations. Therefore, careful monitoring of Apple Inc's debt management and financial leverage strategy is crucial for assessing its overall financial health and risk exposure.
Peer comparison
Sep 30, 2023