Centene Corp (CNC)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 84,641,000 | 76,870,000 | 78,375,000 | 68,719,000 | 40,994,000 |
| Total stockholders’ equity | US$ in thousands | 25,840,000 | 24,057,000 | 26,795,000 | 25,773,000 | 12,551,000 |
| Financial leverage ratio | 3.28 | 3.20 | 2.92 | 2.67 | 3.27 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $84,641,000K ÷ $25,840,000K
= 3.28
Centene Corp.'s financial leverage ratio has shown an increasing trend over the past five years. The ratio stood at 3.28 in 2023, compared to 3.20 in 2022, showing a slight uptick. This indicates that the company relies more on debt financing in 2023 to support its operations and growth compared to the previous year.
Furthermore, the financial leverage ratio has been steadily increasing since 2020 when it was at 2.67. This suggests that Centene Corp. has been taking on more debt relative to its equity over the years. It is important to note that a higher financial leverage ratio implies higher financial risk as the company is more leveraged and has a greater reliance on debt to finance its operations and investments.
Overall, while an increasing financial leverage ratio can amplify returns in good times, it also escalates the risks during economic downturns or other challenging periods. It may be prudent for Centene Corp. to carefully manage its debt levels and ensure a balanced capital structure to mitigate financial risks associated with higher leverage.
Peer comparison
Dec 31, 2023