CTS Corporation (CTS)

Financial leverage ratio

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 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
Total assets US$ in thousands 766,112 789,392 725,622 732,840 741,167 753,962 755,906 747,007 748,487 734,679 729,634 684,746 664,462 651,973 647,298 634,665 626,049 655,853 663,389 685,165
Total stockholders’ equity US$ in thousands 1,017,870 530,806 522,751 521,285 526,822 522,667 521,395 514,136 506,224 490,612 485,947 480,178 463,578 457,374 454,309 435,716 423,682 413,966 400,892 397,466
Financial leverage ratio 0.75 1.49 1.39 1.41 1.41 1.44 1.45 1.45 1.48 1.50 1.50 1.43 1.43 1.43 1.42 1.46 1.48 1.58 1.65 1.72

December 31, 2024 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $766,112K ÷ $1,017,870K
= 0.75

The financial leverage ratio of CTS Corporation has shown a decreasing trend from March 31, 2020, to December 31, 2024. The ratio started at 1.72 on March 31, 2020, and gradually declined to 0.75 by December 31, 2024. A financial leverage ratio of 1 indicates an equal proportion of debt and equity in the company's capital structure.

The decreasing trend in the financial leverage ratio suggests that CTS Corporation has been reducing its reliance on debt financing over the years. A lower financial leverage ratio indicates a lower level of financial risk as the company is using less debt to finance its operations. This might signify a more conservative approach to capital structure management by the company.

The significant drop in the financial leverage ratio from 1.49 on September 30, 2024, to 0.75 on December 31, 2024, raises some questions about the abrupt change in the capital structure of CTS Corporation during that period. It would be important to further investigate the reasons behind such a drastic decrease in the financial leverage ratio to understand the implications for the company's overall financial health and strategic direction.