Digi International Inc (DGII)

Financial leverage ratio

		Sep 30, 2024	Sep 30, 2023	Sep 30, 2022	Sep 30, 2021	Sep 30, 2020
Total assets	US$ in thousands	815,075	835,531	853,895	619,531	528,682
Total stockholders’ equity	US$ in thousands	581,035	540,488	501,513	472,517	371,500
Financial leverage ratio		1.40	1.55	1.70	1.31	1.42

September 30, 2024 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $815,075K ÷ $581,035K
= 1.40

The financial leverage ratio of Digi International Inc has shown some fluctuations over the past five years. The ratio stood at 1.42 in 2020 and decreased to 1.31 in 2021 before increasing to 1.70 in 2022. Subsequently, the ratio decreased to 1.55 in 2023 and further declined to 1.40 in 2024.

A financial leverage ratio of more than 1 indicates that the company has more debt than equity in its capital structure. A higher ratio implies higher financial risk as the company relies more on debt to finance its operations. Conversely, a lower ratio suggests a lower level of financial risk but may also indicate underutilization of leverage to enhance returns.

The decrease in the financial leverage ratio from 2022 to 2024 may indicate that Digi International Inc has been reducing its reliance on debt financing and moving towards a more conservative capital structure. This could be a strategic move to lower financial risk and improve financial stability in the long term.

Overall, a careful consideration of the trend in the financial leverage ratio along with other financial metrics would be necessary to assess the impact of the changes on the company's financial health and performance.