Inter Parfums Inc (IPAR)

Financial leverage ratio

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Total assets	US$ in thousands	1,411,260	1,369,330	1,308,540	1,145,360	890,145
Total stockholders’ equity	US$ in thousands	744,871	699,393	616,782	571,920	535,835
Financial leverage ratio		1.89	1.96	2.12	2.00	1.66

December 31, 2024 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $1,411,260K ÷ $744,871K
= 1.89

The financial leverage ratio measures the extent to which a company relies on debt to finance its operations and growth. Looking at the data for Inter Parfums Inc from December 31, 2020, to December 31, 2024, we observe a fluctuating trend in the financial leverage ratio:

- As of December 31, 2020, the financial leverage ratio stood at 1.66, indicating that the company's assets were financed with 1.66 times more debt than equity.

- By December 31, 2021, the financial leverage ratio increased to 2.00, suggesting a higher reliance on debt financing compared to equity.

- Subsequently, the ratio further increased to 2.12 by December 31, 2022, signaling an elevated level of financial leverage within the company.

- However, the financial leverage ratio decreased to 1.96 by December 31, 2023, indicating a slight reduction in the reliance on debt funding.

- Finally, by December 31, 2024, the ratio fell to 1.89, suggesting a further decline in the proportion of debt used to finance company assets when compared to equity.

Overall, the fluctuation in Inter Parfums Inc's financial leverage ratio over the period indicates variations in the company's capital structure and the extent to which it utilizes debt financing, which could have implications for its risk profile and financial stability.