Fabrinet (FN)
Financial leverage ratio
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 2,338,520 | 1,979,650 | 1,835,640 | 1,616,120 | 1,381,980 |
| Total stockholders’ equity | US$ in thousands | 1,745,740 | 1,468,660 | 1,253,680 | 1,112,520 | 974,409 |
| Financial leverage ratio | 1.34 | 1.35 | 1.46 | 1.45 | 1.42 |
June 30, 2024 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $2,338,520K ÷ $1,745,740K
= 1.34
Fabrinet's financial leverage ratio has fluctuated over the past five years, ranging from 1.34 in 2024 to 1.46 in 2022. The financial leverage ratio indicates the degree to which the company relies on debt financing as opposed to equity. A ratio above 1 suggests that the company has more debt than equity in its capital structure.
A decrease in the financial leverage ratio from 1.46 in 2022 to 1.34 in 2024 may indicate a reduction in the company's reliance on debt to fund its operations. This could be a positive sign, as lower leverage ratios generally imply lower financial risk and greater financial stability.
Overall, it is essential for Fabrinet to carefully manage its debt levels to maintain a healthy balance between debt and equity in its capital structure and ensure sustainable long-term growth. Monitoring changes in the financial leverage ratio can help investors and stakeholders assess the company's financial health and risk profile.
Peer comparison
Jun 30, 2024