CarGurus (CARG)
Financial leverage ratio
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 824,536 | 918,927 | 927,102 | 931,574 | 502,298 |
| Total stockholders’ equity | US$ in thousands | 541,689 | 616,852 | 734,609 | 516,841 | 373,586 |
| Financial leverage ratio | 1.52 | 1.49 | 1.26 | 1.80 | 1.34 |
December 31, 2024 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $824,536K ÷ $541,689K
= 1.52
The financial leverage ratio measures the extent to which a company is using debt to finance its operations and growth. A higher financial leverage ratio indicates more reliance on debt financing, which can pose risks but also potentially amplify returns.
Analyzing CarGurus' financial leverage ratio over the years shows some fluctuation. As of December 31, 2020, the ratio stood at 1.34, indicating a moderate level of debt in the company's capital structure. By December 31, 2021, the ratio increased to 1.80, suggesting a higher reliance on debt to support its operations or expansion.
However, the financial leverage ratio decreased to 1.26 by December 31, 2022, indicating a reduction in debt usage or an increase in equity in the capital structure. The ratio then rose to 1.49 by December 31, 2023, showing a slight uptick in leverage compared to the previous year.
Finally, by December 31, 2024, the financial leverage ratio increased slightly to 1.52, which suggests that CarGurus may be balancing its debt and equity financing to support its activities.
Overall, the trend in CarGurus' financial leverage ratio reflects varying levels of debt utilization over the years, showcasing the company's strategic approach to managing its capital structure and financial risk.
Peer comparison
Dec 31, 2024