Dream Finders Homes Inc (DFH)

Financial leverage ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021
Total assets	US$ in thousands	2,562,440	2,371,140	1,894,250
Total stockholders’ equity	US$ in thousands	924,584	800,693	556,383
Financial leverage ratio		2.77	2.96	3.40

December 31, 2023 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $2,562,440K ÷ $924,584K
= 2.77

Dream Finders Homes Inc's financial leverage ratio has shown a declining trend over the last three years, decreasing from 3.40 in 2021 to 2.77 in 2023. This suggests that the company has been reducing its reliance on debt to finance its operations and investments. A lower financial leverage ratio indicates a lower level of financial risk, as the company has less debt compared to its equity.

The decreasing trend in the financial leverage ratio may indicate that Dream Finders Homes Inc has been successfully managing and utilizing its debt more efficiently over the years. It could also suggest that the company has been generating sufficient profits and cash flows to support its operations without the need for significant debt financing.

Overall, a declining financial leverage ratio is generally viewed positively by investors and creditors as it signifies a stronger financial position and lower risk of default. It implies that the company has a healthy balance between debt and equity, which can contribute to its long-term sustainability and growth prospects.