Doximity Inc (DOCS)

Financial leverage ratio

		Mar 31, 2024	Mar 31, 2023	Mar 31, 2022
Total assets	US$ in thousands	1,079,370	1,136,890	991,357
Total stockholders’ equity	US$ in thousands	901,397	966,116	878,594
Financial leverage ratio		1.20	1.18	1.13

March 31, 2024 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $1,079,370K ÷ $901,397K
= 1.20

Based on the financial leverage ratios of Doximity Inc for the fiscal years ending on March 31, 2022, 2023, and 2024, we observe a gradual increase in the ratio over the period. The financial leverage ratio measures the proportion of a company's debt to its equity, indicating the extent to which the firm relies on debt financing.

Doximity Inc's financial leverage ratio has steadily risen from 1.13 in 2022 to 1.18 in 2023 and further to 1.20 in 2024. This upward trend suggests that the company has been increasingly using debt to finance its operations and investments compared to equity. A higher financial leverage ratio typically indicates a higher level of financial risk as the company is more reliant on borrowed funds.

It is important to carefully assess the implications of this increasing trend in Doximity Inc's financial leverage ratio. While debt can provide tax benefits and leverage returns, excessive reliance on debt financing can also expose the company to higher interest costs and potential financial distress, especially during economic downturns or in the face of unexpected challenges.

Further analysis of the company's overall financial health, cash flow generation, debt repayment capabilities, and long-term sustainability is recommended to fully evaluate the implications of Doximity Inc's changing financial leverage ratio and its potential impact on the company's future performance and growth prospects.