CorVel Corp (CRVL)
Financial leverage ratio
| Mar 31, 2024 | Mar 31, 2023 | Mar 31, 2022 | Mar 31, 2021 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 454,679 | 393,923 | 415,246 | 424,760 | 416,260 |
| Total stockholders’ equity | US$ in thousands | 247,647 | 202,176 | 212,395 | 220,402 | 189,711 |
| Financial leverage ratio | 1.84 | 1.95 | 1.96 | 1.93 | 2.19 |
March 31, 2024 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $454,679K ÷ $247,647K
= 1.84
The financial leverage ratio for CorVel Corp has been fluctuating over the past five years, ranging from 1.84 to 2.19. This ratio indicates the proportion of the company's total assets that are financed by debt compared to equity. A higher financial leverage ratio suggests a higher degree of financial risk due to higher reliance on debt to finance operations.
CorVel Corp's financial leverage ratio decreased slightly from 2.19 in 2020 to 1.84 in 2024. This indicates a reduction in the company's reliance on debt to fund its operations. A lower financial leverage ratio may imply a more conservative financial structure, reducing the risk of financial distress in case of economic downturns or other adverse events.
The decreasing trend in the financial leverage ratio over the years suggests that CorVel Corp may be managing its debt levels effectively and gradually improving its financial stability. However, it is essential to monitor this ratio continuously to ensure that the company maintains an optimal balance between debt and equity financing to support its growth and profitability goals.