Alpha and Omega Semiconductor Ltd (AOSL)

Financial leverage ratio

		Jun 30, 2024	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020
Total assets	US$ in thousands	1,145,010	1,199,740	1,298,630	918,573	792,939
Total stockholders’ equity	US$ in thousands	891,607	883,919	854,093	373,205	293,689
Financial leverage ratio		1.28	1.36	1.52	2.46	2.70

June 30, 2024 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $1,145,010K ÷ $891,607K
= 1.28

The financial leverage ratio of Alpha and Omega Semiconductor Ltd has been gradually decreasing over the past five years. The ratio decreased from 2.70 in June 2020 to 1.28 in June 2024. This indicates that the company has been reducing its reliance on debt to finance its operations and growth over the years.

A lower financial leverage ratio typically suggests a lower level of financial risk for the company, as it indicates that the company has a smaller proportion of debt compared to its equity. This can provide more financial stability and flexibility to the company, especially in times of economic uncertainty or market downturns.

Overall, the decreasing trend in the financial leverage ratio of Alpha and Omega Semiconductor Ltd is a positive signal in terms of financial health and risk management, showing a more conservative approach to capital structure and financing decisions.