Guidewire Software Inc (GWRE)
Financial leverage ratio
| Jul 31, 2024 | Jul 31, 2023 | Jul 31, 2022 | Jul 31, 2021 | Jul 31, 2020 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 2,226,290 | 2,027,890 | 2,266,900 | 2,321,840 | 2,364,850 |
| Total stockholders’ equity | US$ in thousands | 1,342,730 | 1,199,470 | 1,451,660 | 1,544,890 | 1,656,770 |
| Financial leverage ratio | 1.66 | 1.69 | 1.56 | 1.50 | 1.43 |
July 31, 2024 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $2,226,290K ÷ $1,342,730K
= 1.66
The financial leverage ratio of Guidewire Software Inc has been steadily increasing over the past five years, from 1.43 in July 2020 to 1.66 in July 2024. This indicates that the company is relying more on debt financing to fund its operations and growth. As the ratio exceeds 1, it suggests that the company has more debt than equity in its capital structure. A higher financial leverage ratio generally means higher financial risk due to increased interest payments and potential volatility in earnings. Guidewire Software Inc should closely monitor its debt levels and ensure they are sustainable in the long term to avoid potential financial difficulties.
Peer comparison
Jul 31, 2024