Kodiak Gas Services, Inc. (KGS)

Financial leverage ratio

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Total assets	US$ in thousands	4,435,120	3,244,110	3,205,540	3,011,600	3,295,830
Total stockholders’ equity	US$ in thousands	1,359,910	1,142,650	229,093	960,071	755,286
Financial leverage ratio		3.26	2.84	13.99	3.14	4.36

December 31, 2024 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $4,435,120K ÷ $1,359,910K
= 3.26

The financial leverage ratio for Kodiak Gas Services, Inc. exhibits notable fluctuations over the period from December 31, 2020, to December 31, 2024. At the close of 2020, the ratio was 4.36, indicating a moderate level of leverage whereby the company employed approximately 4.36 dollars of total assets for every dollar of shareholders’ equity. This ratio decreased substantially to 3.14 by the end of 2021, suggesting a reduction in leverage and potentially a cautious approach to debt management or increased equity base during that period.

However, a significant spike is apparent in 2022, with the ratio soaring to 13.99. This indicates a substantial increase in leverage, implying that the company significantly increased its debt or liabilities relative to equity during that year. Such a rise could be associated with strategic investments, acquisitions, or capital expenditures financed through debt, or possible deterioration in equity position.

In subsequent years, the ratio demonstrates volatility, decreasing to 2.84 at the end of 2023 and then slightly rising again to 3.26 by the end of 2024. The reduction from the peak in 2022 suggests a deleveraging phase, possibly through debt repayment, increased profitability, or equity infusion, which lowered the overall leverage.

Overall, the financial leverage ratio reflects periods of both conservative and aggressive financial strategies. The peak in 2022 indicates a period of heightened leverage possibly associated with expansion or operational needs, while the subsequent declines and stabilization suggest efforts to manage or reduce financial risk.