Liberty Oilfield Services Inc (LBRT)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 3,033,560 | 2,575,930 | 2,040,660 | 1,889,940 | 1,283,430 |
| Total stockholders’ equity | US$ in thousands | 1,841,410 | 1,495,020 | 1,213,240 | 1,150,640 | 554,827 |
| Financial leverage ratio | 1.65 | 1.72 | 1.68 | 1.64 | 2.31 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $3,033,560K ÷ $1,841,410K
= 1.65
The financial leverage ratio of Liberty Energy Inc has fluctuated over the past five years, ranging from 1.64 to 2.31, with an average of 1.80. The ratio indicates the company's use of debt to finance its operations and investments relative to its equity. A financial leverage ratio greater than 1 implies that the company relies more on debt financing than equity.
In this case, Liberty Energy Inc's financial leverage ratio has generally decreased from 2019 to 2023, suggesting a decreased reliance on debt financing over the years. A lower ratio indicates a lower level of financial risk associated with debt obligations. However, even though the trend has been generally downward, the ratio spiked in 2019, indicating a significant increase in debt compared to equity that year.
Overall, the decreasing trend in the financial leverage ratio of Liberty Energy Inc indicates a more conservative approach to financing its operations, which may lead to reduced financial risk and increased stability in the long term.
Peer comparison
Dec 31, 2023