CarGurus (CARG)

Financial leverage ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Total assets	US$ in thousands	918,927	927,102	931,574	502,298	393,623
Total stockholders’ equity	US$ in thousands	616,852	734,609	516,841	373,586	256,855
Financial leverage ratio		1.49	1.26	1.80	1.34	1.53

December 31, 2023 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $918,927K ÷ $616,852K
= 1.49

The financial leverage ratio for CarGurus Inc has fluctuated over the past five years, reflecting changes in the company's capital structure and financial risk profile.

In 2023, the financial leverage ratio stands at 1.49, indicating that the company's financial leverage has increased compared to the previous year. This could suggest that CarGurus Inc has taken on more debt relative to its equity, potentially increasing its financial risk.

In 2022, the ratio was 1.26, which signifies a lower level of financial leverage compared to 2021. This could imply that the company had a more conservative capital structure that year, with a decreased reliance on debt financing.

The ratio spiked in 2021 at 1.80, indicating a significant increase in financial leverage. This could suggest that CarGurus Inc leveraged its operations more aggressively through debt financing, potentially to fund growth opportunities or strategic initiatives.

In 2020, the ratio stood at 1.34, showing a lower level of financial leverage compared to 2021 but still relatively high. This suggests that the company maintained a moderate level of debt relative to equity that year.

In 2019, the ratio was 1.53, slightly higher than in 2020 but lower than the peak in 2021. This indicates that CarGurus Inc had a higher level of financial leverage that year compared to 2020 but had not yet reached the peak seen in 2021.

Overall, the fluctuation in CarGurus Inc's financial leverage ratio over the past five years highlights variations in the company's capital structure decisions and their impact on its financial risk profile. It is essential for stakeholders to monitor these trends to assess the company's ability to manage its debt levels effectively and optimize its overall financial performance.