Extreme Networks Inc (EXTR)

Financial leverage ratio

		Jun 30, 2024	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020
Total assets	US$ in thousands	1,042,590	1,141,710	1,068,510	1,010,090	979,088
Total stockholders’ equity	US$ in thousands	25,282	116,752	90,343	54,468	5,398
Financial leverage ratio		41.24	9.78	11.83	18.54	181.38

June 30, 2024 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $1,042,590K ÷ $25,282K
= 41.24

Extreme Networks Inc's financial leverage ratio has fluctuated over the past five years, ranging from a high of 181.38 in 2020 to a low of 9.78 in 2023. The financial leverage ratio measures the extent to which a company relies on debt financing to fund its operations and investments. A higher financial leverage ratio indicates a greater reliance on debt, while a lower ratio suggests a greater reliance on equity.

In 2024, Extreme Networks Inc's financial leverage ratio stands at 41.24, indicating that the company has moderate reliance on debt to finance its activities. This represents an increase from the previous year, showing a higher level of debt compared to equity in the company's capital structure.

It is important to note that a high financial leverage ratio can increase the company's financial risk as it may face challenges in meeting debt obligations, especially during economic downturns or periods of financial distress. On the other hand, a low financial leverage ratio may indicate a conservative approach to financing, but it could also limit the company's growth potential due to lower leverage.

Overall, Extreme Networks Inc's financial leverage ratio suggests a moderate level of debt in its capital structure in 2024, highlighting the importance of monitoring debt levels and managing financial risk effectively.