Arlo Technologies (ARLO)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 285,538 | 272,201 | 347,490 | 413,968 | 542,712 |
| Total stockholders’ equity | US$ in thousands | 103,276 | 87,695 | 112,652 | 133,767 | 203,376 |
| Financial leverage ratio | 2.76 | 3.10 | 3.08 | 3.09 | 2.67 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $285,538K ÷ $103,276K
= 2.76
The financial leverage ratio of Arlo Technologies Inc has shown some variability over the past five years, ranging from 2.67 in 2019 to 3.10 in 2022. The ratio indicates how much of the company's assets are funded by debt compared to equity. A higher ratio suggests a higher level of financial risk due to increased debt levels, whereas a lower ratio indicates a more conservative capital structure.
In 2023, the financial leverage ratio decreased to 2.76 from the previous year, signaling a slight reduction in the company's reliance on debt to finance its operations. This may indicate a more balanced mix of debt and equity in the company's capital structure, potentially reducing financial risk.
It is important for Arlo Technologies Inc to carefully manage its financial leverage ratio to ensure a sustainable and optimal capital structure that supports growth and profitability while minimizing risk. Monitoring changes in the ratio over time can provide insights into the company's financial health and risk profile.
Peer comparison
Dec 31, 2023