Applied Materials Inc (AMAT)

Financial leverage ratio

		Jan 28, 2024	Oct 29, 2023	Jul 30, 2023	Apr 30, 2023	Jan 29, 2023	Oct 30, 2022	Jul 31, 2022	May 1, 2022	Jan 30, 2022	Oct 31, 2021	Aug 1, 2021	May 2, 2021	Jan 31, 2021	Oct 25, 2020	Jul 26, 2020	Apr 26, 2020	Jan 26, 2020	Oct 27, 2019	Jul 28, 2019	Apr 28, 2019
Total assets	US$ in thousands	31,540,000	30,729,000	30,410,000	29,092,000	27,959,000	26,726,000	26,161,000	25,459,000	25,428,000	25,825,000	24,479,000	24,085,000	23,305,000	22,353,000	21,171,000	21,815,000	19,767,000	19,024,000	18,805,000	18,775,000
Total stockholders’ equity	US$ in thousands	17,429,000	16,349,000	15,093,000	14,129,000	13,420,000	12,194,000	12,070,000	11,579,000	11,890,000	12,247,000	12,060,000	11,993,000	11,473,000	10,578,000	9,569,000	9,024,000	8,660,000	8,214,000	8,116,000	8,201,000
Financial leverage ratio		1.81	1.88	2.01	2.06	2.08	2.19	2.17	2.20	2.14	2.11	2.03	2.01	2.03	2.11	2.21	2.42	2.28	2.32	2.32	2.29

January 28, 2024 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $31,540,000K ÷ $17,429,000K
= 1.81

The financial leverage ratio of Applied Materials Inc. has shown a decreasing trend over the past several quarters. Starting at 2.20 in Q2 2022, the ratio has steadily decreased to 1.81 in Q1 2024. This suggests that the company has been reducing its reliance on debt to finance its operations and investments over time.

A lower financial leverage ratio generally indicates a lower level of financial risk for the company, as it implies less debt financing relative to equity. Applied Materials Inc.'s decreasing ratio may indicate a more conservative capital structure and improved financial stability.

It is important to note that while a lower financial leverage ratio reduces financial risk, it may also limit potential returns on equity for shareholders. Overall, the decreasing trend in Applied Materials Inc.'s financial leverage ratio reflects a movement towards a more balanced and potentially more sustainable capital structure.