Healthcare Services Group Inc (HCSG)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 790,652 | 720,836 | 777,529 | 785,031 | 722,592 |
| Total stockholders’ equity | US$ in thousands | 456,616 | 418,279 | 452,677 | 480,461 | 460,305 |
| Financial leverage ratio | 1.73 | 1.72 | 1.72 | 1.63 | 1.57 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $790,652K ÷ $456,616K
= 1.73
The financial leverage ratio of Healthcare Services Group, Inc. has shown a fluctuating trend over the past five years. The ratio increased from 1.57 in 2019 to 1.73 in 2023, indicating a higher level of financial leverage in the most recent year. This suggests that the company is relying more on debt to finance its operations and investments.
While an increasing financial leverage ratio can amplify profits during periods of growth, it also exposes the company to higher financial risk, especially during economic downturns or periods of instability. Therefore, investors and creditors may view this trend cautiously, as it could impact the company's ability to meet its financial obligations in the long run.
It would be important for Healthcare Services Group, Inc. to closely monitor its debt levels and ensure that its operations can comfortably support the increased leverage to maintain financial stability and sustainability over time.