Exponent Inc (EXPO)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 646,777 | 586,662 | 683,739 | 580,096 | 563,411 |
| Total stockholders’ equity | US$ in thousands | 356,085 | 320,752 | 417,065 | 361,498 | 350,251 |
| Financial leverage ratio | 1.82 | 1.83 | 1.64 | 1.60 | 1.61 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $646,777K ÷ $356,085K
= 1.82
The financial leverage ratio for Exponent Inc has been fluctuating over the past five years. The ratio stood at 1.61 in 2019, slightly increased to 1.60 in 2020, and further rose to 1.64 in 2021. However, the ratio saw a slight decrease in 2022 to 1.83, followed by another decline to 1.82 in 2023.
A financial leverage ratio above 1 indicates that the company relies more on debt to finance its operations rather than equity. Exponent Inc's increasing trend in the financial leverage ratio from 2019 to 2021 suggests a higher level of debt financing during those years. The subsequent decrease in 2022 and 2023 may indicate a shift towards a more balanced capital structure or reduced reliance on debt.
It is important for Exponent Inc to closely monitor its financial leverage ratio to ensure that it maintains an optimal capital structure that balances the benefits and risks associated with debt financing. A consistent and sustainable level of leverage is crucial for the company's long-term financial health and stability.
Peer comparison
Dec 31, 2023