Lumentum Holdings Inc (LITE)
Financial leverage ratio
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 3,931,900 | 4,632,100 | 4,162,200 | 3,551,600 | 3,292,600 |
| Total stockholders’ equity | US$ in thousands | 957,300 | 1,355,800 | 1,875,000 | 1,972,800 | 1,749,200 |
| Financial leverage ratio | 4.11 | 3.42 | 2.22 | 1.80 | 1.88 |
June 30, 2024 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $3,931,900K ÷ $957,300K
= 4.11
The financial leverage ratio of Lumentum Holdings Inc has displayed an upward trend over the past five years, increasing from 1.88 in 2020 to 4.11 in 2024. This indicates that the company's reliance on debt to finance its operations and growth has been increasing significantly. A high financial leverage ratio suggests that a larger portion of the company's assets are funded by debt rather than equity, which can amplify returns on equity when business is booming but also increase risks during economic downturns. It is important for investors and creditors to closely monitor this trend in financial leverage, as it can impact the company's financial stability and ability to meet its debt obligations in the long run.
Peer comparison
Jun 30, 2024