Amphastar P (AMPH)

Financial leverage ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Total assets	US$ in thousands	1,512,910	741,987	671,529	631,236	586,971
Total stockholders’ equity	US$ in thousands	639,421	528,658	445,522	402,306	381,366
Financial leverage ratio		2.37	1.40	1.51	1.57	1.54

December 31, 2023 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $1,512,910K ÷ $639,421K
= 2.37

Amphastar Pharmaceuticals Inc's financial leverage ratio has shown fluctuations over the past five years. The ratio has increased from 1.54 in 2019 to 2.37 in 2023, indicating a higher level of financial leverage in the most recent year. This suggests that the company is relying more on debt financing compared to equity financing.

It is important to note that a high financial leverage ratio can magnify both positive and negative financial outcomes. While debt can provide tax advantages and leverage returns for shareholders, it also exposes the company to higher financial risk, especially in times of economic downturn or rising interest rates.

Investors and creditors should closely monitor changes in the financial leverage ratio to assess the company's ability to meet its financial obligations and manage its debt levels effectively. Additionally, management should exercise caution in balancing debt and equity financing to maintain a sustainable capital structure and overall financial health.