IPG Photonics Corporation (IPGP)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 2,698,900 | 2,743,280 | 3,170,540 | 2,935,700 | 2,730,440 |
| Total stockholders’ equity | US$ in thousands | 2,415,380 | 2,385,360 | 2,746,580 | 2,592,820 | 2,401,730 |
| Financial leverage ratio | 1.12 | 1.15 | 1.15 | 1.13 | 1.14 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $2,698,900K ÷ $2,415,380K
= 1.12
The financial leverage ratio of IPG Photonics Corp has shown some fluctuation over the past five years, ranging from 1.12 in 2023 to 1.15 in both 2022 and 2021. The ratio indicates that the company has been utilizing debt to finance its operations and investments, with a higher ratio suggesting a higher level of debt relative to equity in the capital structure.
Having a financial leverage ratio above 1 indicates that the company has more debt than equity in its capital structure, which can potentially magnify returns on equity when the company performs well but can also increase financial risk when the company faces challenges. Despite some variation, the relatively stable range of the financial leverage ratio over the years suggests that the company has maintained a consistent level of leverage in its operations.
It is important for stakeholders to monitor changes in the financial leverage ratio over time to ensure that the company's capital structure remains sustainable and in line with its growth and risk objectives. Overall, the financial leverage ratio analysis provides insights into how IPG Photonics Corp has been managing its debt and equity to support its business activities.
Peer comparison
Dec 31, 2023