Altair Engineering Inc (ALTR)

Financial leverage ratio

Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019
Total assets US$ in thousands 1,379,910 1,363,490 1,251,990 1,255,810 1,226,170 1,204,740 1,124,930 1,128,510 1,133,690 1,163,280 1,014,480 820,216 817,913 829,902 779,703 736,846 734,654 743,145 716,700 729,720
Total stockholders’ equity US$ in thousands 762,928 711,331 634,118 620,215 606,905 569,736 535,529 558,172 618,425 613,197 602,262 399,345 399,029 378,586 359,455 354,950 356,145 354,707 343,341 359,841
Financial leverage ratio 1.81 1.92 1.97 2.02 2.02 2.11 2.10 2.02 1.83 1.90 1.68 2.05 2.05 2.19 2.17 2.08 2.06 2.10 2.09 2.03

March 31, 2024 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $1,379,910K ÷ $762,928K
= 1.81

Altair Engineering Inc's financial leverage ratio has exhibited fluctuations over the past few quarters, ranging from 1.68 to 2.19. The company's financial leverage ratio peaked at 2.19 in Q4 2020 and has since shown some variability, with the latest reported ratio standing at 1.81 as of March 31, 2024.

A financial leverage ratio above 1 indicates that the company relies more on debt financing than equity financing to fund its operations and investments. A higher financial leverage ratio can amplify returns on equity when the company is performing well, but it also increases the financial risk associated with the business due to higher interest payments and debt obligations.

Altair Engineering Inc's declining financial leverage ratio trend from Q4 2020 to Q1 2024 suggests a potential deleveraging strategy or a shift towards a more conservative capital structure. It is important for investors and stakeholders to monitor the company's leverage levels relative to its industry peers and overall economic conditions to assess the potential impact on the company's financial stability and growth prospects.