Duolingo Inc (DUOL)
Financial leverage ratio
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 1,301,730 | 953,957 | 747,347 | 661,311 | 175,739 |
| Total stockholders’ equity | US$ in thousands | 824,550 | 655,501 | 542,078 | 513,056 | -80,691 |
| Financial leverage ratio | 1.58 | 1.46 | 1.38 | 1.29 | — |
December 31, 2024 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $1,301,730K ÷ $824,550K
= 1.58
The financial leverage ratio for Duolingo Inc has been gradually increasing over the years, indicating a rising level of financial leverage. The ratio was not available for analysis in 2020, but it stood at 1.29 as of December 31, 2021, and has since increased to 1.38 in 2022, 1.46 in 2023, and 1.58 in 2024. This upward trend suggests that the company is relying more on debt to finance its operations and investments. While an increase in financial leverage can potentially amplify returns for shareholders, it also escalates the company's financial risk due to the higher interest payments and potential financial distress in case of economic downturns. Additional insights into Duolingo Inc's capital structure and risk management strategies would be beneficial to fully assess the implications of the increasing financial leverage ratio.
Peer comparison
Dec 31, 2024