IDEXX Laboratories Inc (IDXX)

Financial leverage ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Total assets	US$ in thousands	3,259,920	2,746,760	2,437,200	2,294,560	1,832,480
Total stockholders’ equity	US$ in thousands	1,484,530	608,737	689,992	632,088	177,473
Financial leverage ratio		2.20	4.51	3.53	3.63	10.33

December 31, 2023 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $3,259,920K ÷ $1,484,530K
= 2.20

The financial leverage ratio of Idexx Laboratories, Inc. has exhibited fluctuations over the past five years. Starting with a relatively high ratio of 10.33 in 2019, the company's leverage ratio dropped significantly to 3.63 in 2020, indicating a reduction in reliance on debt to finance its operations. However, there was an increase in the ratio to 3.53 in 2021, suggesting a slight uptick in leverage.

The most notable change was seen in 2022 when the financial leverage ratio drastically decreased to 4.51, reflecting a substantial decrease in the company's reliance on debt to fund its assets and operations. This reduction in leverage could signify improved financial stability and reduced financial risk for the company.

In 2023, the financial leverage ratio further decreased to 2.20, indicating a continued trend of lower reliance on debt financing. A lower leverage ratio generally indicates that the company is financing a smaller portion of its assets through debt, which could be viewed positively by investors and creditors.

Overall, the downward trend in Idexx Laboratories' financial leverage ratio over the past few years suggests a shift towards a more conservative capital structure and potentially stronger financial health. It is important to note that while moderate leverage can enhance returns, excessive leverage can expose the company to increased financial risk, especially during economic downturns.