Globus Medical (GMED)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 5,086,080 | 2,076,130 | 1,957,260 | 1,679,480 | 1,532,080 |
| Total stockholders’ equity | US$ in thousands | 3,997,960 | 1,846,370 | 1,741,390 | 1,506,300 | 1,402,450 |
| Financial leverage ratio | 1.27 | 1.12 | 1.12 | 1.11 | 1.09 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $5,086,080K ÷ $3,997,960K
= 1.27
The financial leverage ratio of Globus Medical Inc has been gradually increasing over the past five years, from 1.09 in 2019 to 1.27 in 2023. This indicates that the company is relying more on debt to finance its operations and growth.
A financial leverage ratio above 1 signifies that the company has more debt than equity in its capital structure. While leverage can amplify returns when business is good, it also increases financial risk as the company needs to make regular interest payments and repayments of the principal amount.
An increasing financial leverage ratio may raise concerns about the company's ability to service its debt obligations, especially during economic downturns or periods of high interest rates. It is important for investors and stakeholders to closely monitor the trend in the financial leverage ratio and assess the company's overall financial health and risk profile.
Peer comparison
Dec 31, 2023