Cohu Inc (COHU)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 1,150,350 | 1,227,410 | 1,259,040 | 1,090,350 | 1,077,710 |
| Total stockholders’ equity | US$ in thousands | 950,170 | 928,841 | 882,502 | 512,288 | 483,072 |
| Financial leverage ratio | 1.21 | 1.32 | 1.43 | 2.13 | 2.23 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $1,150,350K ÷ $950,170K
= 1.21
The financial leverage ratio of Cohu Inc has been decreasing over the past five years, indicating a declining trend in the company's use of debt to finance its operations. The ratio decreased from 2.23 in 2019 to 1.21 in 2023. This suggests that the company has been relying less on debt and more on equity financing over this period.
A lower financial leverage ratio generally indicates lower financial risk and less reliance on debt for funding, which can be viewed positively by investors and creditors. However, companies with lower leverage ratios may potentially be missing out on the tax benefits of debt financing or the opportunity to leverage financial leverage to magnify returns.
It is important to note that a declining financial leverage ratio may also be a sign of conservative financial management or a decrease in profitability that limits the capacity of the company to take on debt. Further analysis of Cohu Inc's financial statements and industry trends would be necessary to fully understand the implications of this trend in the financial leverage ratio.
Peer comparison
Dec 31, 2023