Deluxe Corporation (DLX)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 3,080,620 | 3,076,520 | 3,074,380 | 1,842,180 | 1,943,310 |
| Total stockholders’ equity | US$ in thousands | 604,094 | 603,809 | 574,318 | 540,697 | 570,861 |
| Financial leverage ratio | 5.10 | 5.10 | 5.35 | 3.41 | 3.40 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $3,080,620K ÷ $604,094K
= 5.10
The financial leverage ratio of Deluxe Corp. has fluctuated over the past five years. In 2019 and 2020, the company had a relatively stable financial leverage ratio of around 3.40 to 3.47. However, in 2021, the ratio increased to 5.35, indicating a significant increase in the company's financial leverage. This high leverage may suggest that Deluxe Corp. increased its reliance on debt to finance its operations during that period.
Subsequently, the ratio remained relatively constant at 5.10 in both 2022 and 2023, indicating that the company maintained a high level of leverage in the following years. A financial leverage ratio of 5.10 suggests that for every $1 of equity, Deluxe Corp. has $5.10 of debt, highlighting a higher risk due to increased financial leverage.
Overall, the trend in Deluxe Corp.'s financial leverage ratio indicates a shift towards higher leverage in recent years, which could potentially impact the company's financial stability and ability to meet its debt obligations in the long term.