InterDigital Inc (IDCC)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 1,770,810 | 1,900,100 | 1,628,160 | 1,616,280 | 1,612,080 |
| Total stockholders’ equity | US$ in thousands | 581,549 | 724,895 | 745,239 | 773,369 | 761,557 |
| Financial leverage ratio | 3.04 | 2.62 | 2.18 | 2.09 | 2.12 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $1,770,810K ÷ $581,549K
= 3.04
Interdigital Inc's financial leverage ratio has been gradually increasing over the past five years, reaching 3.04 in 2023 from 2.12 in 2019. This indicates that the company has been relying more on debt financing relative to equity to support its operations and growth. A higher financial leverage ratio means that Interdigital has higher financial risk, as it has a larger proportion of debt in its capital structure.
The increasing trend in the financial leverage ratio may suggest that Interdigital has been taking on more debt to fund expansion or investment opportunities. While debt can be a cheaper source of funding compared to equity, it also comes with interest payments and repayment obligations that need to be managed effectively to avoid financial distress.
Investors and creditors may closely monitor Interdigital's financial leverage ratio to assess the company's ability to meet its debt obligations and sustain its operations in the long term. A high financial leverage ratio can indicate a higher likelihood of default in case of economic downturns or adverse business conditions. Management should maintain a balance between debt and equity financing to ensure the company's financial stability and solvency.
Peer comparison
Dec 31, 2023