Duolingo Inc (DUOL)

Financial leverage ratio

Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022
Total assets US$ in thousands 1,068,670 953,957 870,714 834,803 790,379 747,347 713,699 701,050 684,511
Total stockholders’ equity US$ in thousands 711,052 655,501 614,819 596,405 565,188 542,078 533,826 528,219 520,714
Financial leverage ratio 1.50 1.46 1.42 1.40 1.40 1.38 1.34 1.33 1.31

March 31, 2024 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $1,068,670K ÷ $711,052K
= 1.50

Duolingo Inc's financial leverage ratio has shown a generally increasing trend over the past quarters, rising from 1.21 in September 2021 to 1.50 in March 2024. This indicates that the company has been increasingly relying on debt financing to support its operations and growth. A higher financial leverage ratio suggests that a larger portion of the company's assets is financed through debt rather than equity. While higher leverage can amplify returns on equity, it also increases financial risk as the company has to make interest payments and repay principal amounts on the borrowed funds. It will be important for Duolingo to manage its debt levels prudently to ensure its long-term financial health and stability.