The Ensign Group Inc (ENSG)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 4,177,540 | 3,452,020 | 2,850,620 | 2,545,580 | 2,361,910 |
| Total stockholders’ equity | US$ in thousands | 1,491,860 | 1,247,330 | 1,020,770 | 818,077 | 654,197 |
| Financial leverage ratio | 2.80 | 2.77 | 2.79 | 3.11 | 3.61 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $4,177,540K ÷ $1,491,860K
= 2.80
The financial leverage ratio of Ensign Group Inc has fluctuated over the past five years, ranging from 2.77 to 3.61. The ratio indicates the company's reliance on debt financing to support its operations and growth. A higher financial leverage ratio suggests a greater proportion of debt in the company's capital structure, which can potentially amplify returns but also increase financial risk.
In this case, Ensign Group Inc's financial leverage ratio decreased slightly from 3.61 in 2019 to 2.80 in 2023. This may indicate a decrease in the proportion of debt used to finance the company's assets, which could reduce the overall financial risk. However, it is essential to consider other factors such as profitability, cash flow, and interest coverage when assessing the company's financial health and risk management practices. Overall, a moderate level of financial leverage can be beneficial for a company, as it can help optimize capital structure and enhance returns for shareholders.
Peer comparison
Dec 31, 2023