Advanced Micro Devices Inc (AMD)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 67,885,000 | 67,580,000 | 12,419,000 | 8,962,000 | 6,028,000 |
| Total stockholders’ equity | US$ in thousands | 55,892,000 | 54,750,000 | 7,497,000 | 5,837,000 | 2,827,000 |
| Financial leverage ratio | 1.21 | 1.23 | 1.66 | 1.54 | 2.13 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $67,885,000K ÷ $55,892,000K
= 1.21
The financial leverage ratio of Advanced Micro Devices Inc has shown fluctuations over the past five years. The trend indicates a decrease in financial leverage from 2.13 in 2019 to 1.21 in 2023. This suggests that the company has reduced its reliance on debt to finance its operations.
A financial leverage ratio of 1.21 in 2023 indicates that for every $1 of equity, the company has $1.21 of total assets. This implies that a larger proportion of the company's assets are funded through equity rather than debt.
The decreasing trend in the financial leverage ratio can be seen as a positive sign, as lower leverage levels reduce the company's financial risk and vulnerability to economic downturns. However, it's important to note that a lower leverage ratio may also indicate lower potential returns on equity, as debt can amplify profits in favorable market conditions.
Overall, the decreasing trend in Advanced Micro Devices Inc's financial leverage ratio suggests a more conservative approach to capital structure management over the past five years.
Peer comparison
Dec 31, 2023