CarGurus (CARG)

Financial leverage ratio

		Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Total assets	US$ in thousands	918,927	1,048,720	1,040,320	1,051,580	927,102	982,855	1,009,710	945,805	931,574	819,917	784,205	719,393	502,298	460,551	407,436	406,438	393,623	369,383	346,161	331,927
Total stockholders’ equity	US$ in thousands	616,852	716,994	700,854	695,808	734,609	577,931	461,835	464,865	516,841	589,256	549,181	508,655	373,586	338,259	295,855	277,968	256,855	237,102	222,386	211,009
Financial leverage ratio		1.49	1.46	1.48	1.51	1.26	1.70	2.19	2.03	1.80	1.39	1.43	1.41	1.34	1.36	1.38	1.46	1.53	1.56	1.56	1.57

December 31, 2023 calculation

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

The financial leverage ratio of CarGurus Inc has exhibited fluctuations over the past eight quarters, ranging from 1.26 to 2.19. The ratio indicates the company's level of debt relative to its equity capital. A higher ratio suggests a higher level of financial leverage and reliance on debt financing, which can amplify returns but also increase financial risk.

CarGurus Inc's financial leverage ratio was relatively stable in the range of 1.46 to 1.51 during Q1 to Q3 of 2023, indicating a moderate level of leverage. However, there was a significant increase in leverage in Q4 2023 compared to the previous quarters. This could be due to either an increase in debt or a decrease in equity during that period.

It is noteworthy that the financial leverage ratio was notably high in Q2 and Q3 2022, reaching levels of 2.19 and 2.03, respectively. This indicates a substantial reliance on debt during that period, which may have implications for the company's financial stability and flexibility.

Overall, monitoring the trend of CarGurus Inc's financial leverage ratio is important for assessing the company's capital structure and risk profile, as well as its ability to meet financial obligations and sustain long-term growth.