Group 1 Automotive Inc (GPI)

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	7,774,100	7,439,600	7,424,600	6,923,200	6,717,500	6,251,500	6,102,800	6,039,600	5,749,400	4,757,600	4,855,900	5,065,100	5,089,400	4,983,400	4,859,600	5,441,100	5,570,200	5,329,000	5,225,760	5,263,490
Total stockholders’ equity	US$ in thousands	2,674,400	2,611,400	2,518,900	2,352,500	2,237,500	2,214,100	2,004,500	1,949,200	1,825,200	1,918,600	1,754,000	1,576,600	1,449,600	1,356,900	1,215,900	1,174,600	1,255,700	1,186,300	1,164,100	1,127,700
Financial leverage ratio		2.91	2.85	2.95	2.94	3.00	2.82	3.04	3.10	3.15	2.48	2.77	3.21	3.51	3.67	4.00	4.63	4.44	4.49	4.49	4.67

December 31, 2023 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $7,774,100K ÷ $2,674,400K
= 2.91

Group 1 Automotive, Inc.'s financial leverage ratio has been relatively stable over the past eight quarters, ranging from 2.82 to 3.10. The ratio indicates that, on average, the company relies on debt financing to fund its operations to a significant extent. A higher financial leverage ratio signifies a higher proportion of debt in the company's capital structure compared to equity. This indicates potential risk, as a higher level of debt could increase financial vulnerability and interest expenses, especially in times of economic uncertainty or rising interest rates. It also suggests that the company may have limited flexibility in managing its financial obligations and may face challenges in meeting debt repayment obligations. Overall, monitoring the financial leverage ratio over time can provide insights into the company's capital structure and financial risk profile.