ELF Beauty Inc (ELF)

Financial leverage ratio

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	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	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020
Total assets	US$ in thousands	1,264,830	1,237,020	1,204,830	1,129,250	1,108,280	746,936	657,881	595,601	555,925	542,141	513,857	494,632	490,950	493,012	498,392	487,393	480,905	473,424	462,068	453,104
Total stockholders’ equity	US$ in thousands	767,387	727,695	703,590	642,572	614,224	516,428	471,702	411,017	385,304	356,960	333,449	312,429	305,468	294,093	282,622	269,646	264,602	254,653	248,708	242,171
Financial leverage ratio		1.65	1.70	1.71	1.76	1.80	1.45	1.39	1.45	1.44	1.52	1.54	1.58	1.61	1.68	1.76	1.81	1.82	1.86	1.86	1.87

December 31, 2024 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $1,264,830K ÷ $767,387K
= 1.65

The financial leverage ratio of ELF Beauty Inc has exhibited a decreasing trend over the period from March 31, 2020, to December 31, 2024. The ratio started at 1.87 in March 2020 and gradually decreased to 1.65 by December 2024. This indicates that the company has been effectively reducing its reliance on debt to finance its operations and investments over the years.

A lower financial leverage ratio suggests that the company is relying more on equity financing rather than debt financing, which can be viewed positively as it reduces the financial risk and potential financial distress. However, it's important to note that a very low financial leverage ratio may also indicate underutilization of debt, which could hinder the company's ability to benefit from the tax advantages of debt financing.

Overall, the decreasing trend in ELF Beauty Inc's financial leverage ratio reflects a prudent approach to capital structure management, signaling improved financial stability and potential flexibility in managing future financial obligations.