Frontdoor Inc (FTDR)
Financial leverage ratio
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 1,089,000 | 1,168,000 | 1,136,000 | 1,128,000 | 1,082,000 | 1,095,000 | 1,076,000 | 1,058,000 | 1,069,000 | 1,161,000 | 1,135,000 | 1,355,000 | 1,405,000 | 1,407,000 | 1,361,000 | 1,291,000 | 1,250,000 | 1,217,000 | 1,179,000 | 1,097,000 |
| Total stockholders’ equity | US$ in thousands | 136,000 | 171,000 | 131,000 | 83,000 | 61,000 | 47,000 | 6,000 | -20,000 | 2,000 | 62,000 | 3,000 | -46,000 | -61,000 | -71,000 | -125,000 | -178,000 | -179,000 | -219,000 | -278,000 | -334,000 |
| Financial leverage ratio | 8.01 | 6.83 | 8.67 | 13.59 | 17.74 | 23.30 | 179.33 | — | 534.50 | 18.73 | 378.33 | — | — | — | — | — | — | — | — | — |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $1,089,000K ÷ $136,000K
= 8.01
The financial leverage ratio of Frontdoor Inc. has fluctuated significantly over the past eight quarters. The ratio was 7.95 in Q4 2023, indicating that the company had a higher proportion of debt in its capital structure compared to equity. This ratio decreased to 6.88 in Q3 2023, suggesting a slight improvement in the balance between debt and equity financing.
However, in Q2 2023, the financial leverage ratio spiked to 8.67, which could be a cause for concern as it indicates higher financial risk and reliance on debt to fund operations. The ratio then increased further to 13.60 in Q1 2023, signaling a significant increase in leverage.
Looking back to Q4 2022 and Q3 2022, the financial leverage ratio was even higher at 17.74 and 22.79, respectively, highlighting a historical trend of increasing leverage. Q2 2022 saw a substantial spike in the financial leverage ratio to 179.33, which is unusually high and may suggest a significant reliance on debt financing during that period.
The absence of data for Q1 2022 limits a comprehensive trend analysis, but the available data indicates that Frontdoor Inc. has experienced fluctuations in its financial leverage ratio, with some quarters showing concerning levels of leverage. It is essential for the company to carefully manage its debt levels to maintain a healthy balance between debt and equity financing and mitigate financial risks.
Peer comparison
Dec 31, 2023