Allegiant Travel Company (ALGT)

Financial leverage ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Total assets	US$ in thousands	4,869,410	4,511,300	3,991,070	3,258,920	3,010,800
Total stockholders’ equity	US$ in thousands	1,328,560	1,220,700	1,223,550	699,363	883,551
Financial leverage ratio		3.67	3.70	3.26	4.66	3.41

December 31, 2023 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $4,869,410K ÷ $1,328,560K
= 3.67

Allegiant Travel's financial leverage ratio has fluctuated over the past five years, ranging from 3.26 to 4.66. The financial leverage ratio measures the extent to which a company relies on debt to finance its operations. A higher financial leverage ratio indicates a higher level of debt relative to equity, which can magnify both gains and losses for shareholders.

In 2020, Allegiant Travel had a relatively high financial leverage ratio of 4.66, suggesting a significant reliance on debt to fund its operations that year. This could pose higher financial risk due to increased interest payments and potential challenges in servicing debt obligations.

Conversely, in 2021, the financial leverage ratio decreased to 3.26, indicating a lower degree of debt utilization compared to the previous year. This shift may suggest a more conservative approach to financing, potentially reducing financial risk and improving the company's financial stability.

Overall, the fluctuating trend in Allegiant Travel's financial leverage ratio over the past five years indicates varying levels of debt reliance and financial risk management. It is essential for investors and stakeholders to closely monitor how the company balances its use of debt to optimize its capital structure and enhance shareholder value.