Community Healthcare Trust Inc (CHCT)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 945,412 | 876,425 | 754,233 | 668,402 | 562,531 |
| Total stockholders’ equity | US$ in thousands | 513,256 | 496,814 | 462,112 | 429,916 | 353,411 |
| Financial leverage ratio | 1.84 | 1.76 | 1.63 | 1.55 | 1.59 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $945,412K ÷ $513,256K
= 1.84
Community Healthcare Trust Inc has shown a consistent increase in its financial leverage ratio over the past five years, indicating a gradual build-up of leverage in its capital structure. The ratio has moved from 1.59 in 2019 to 1.84 in 2023. This suggests that the company has been relying more on debt financing compared to equity financing to support its operations and growth. A high financial leverage ratio can magnify returns on equity when the company is generating positive returns on its investments. However, it also increases the company's financial risk as higher levels of debt need to be serviced through interest payments and principal repayments. Investors and creditors should closely monitor this trend in leverage to assess the company's ability to manage its debt obligations and financial risks effectively.
Peer comparison
Dec 31, 2023