Manhattan Associates Inc (MANH)

Financial leverage ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Total assets	US$ in thousands	673,353	570,178	539,708	465,412	372,279
Total stockholders’ equity	US$ in thousands	278,278	226,800	250,644	218,897	142,278
Financial leverage ratio		2.42	2.51	2.15	2.13	2.62

December 31, 2023 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $673,353K ÷ $278,278K
= 2.42

The financial leverage ratio of Manhattan Associates, Inc. has exhibited some fluctuations in recent years. The ratio was highest in 2019 at 2.62 and decreased to 2.13 in 2020. There was a slight increase in 2021 to 2.15, followed by a higher ratio of 2.51 in 2022. However, in 2023, the financial leverage ratio decreased to 2.42.

A financial leverage ratio above 1 indicates that the company is utilizing debt to finance its operations. Manhattan Associates, Inc. has consistently maintained a financial leverage ratio above 2 in the past five years. This level of leverage suggests that a significant portion of the company's operations is funded through debt.

While a high financial leverage ratio can amplify returns during periods of growth, it also increases the company's financial risk. This is because the company must continue to meet interest and principal payments on its debt even if its profitability declines.

Overall, Manhattan Associates, Inc.'s financial leverage ratio indicates a moderate to high level of leverage in its capital structure, which can have implications for the company's risk profile and financial performance. Management should continue to monitor and manage the company's debt levels effectively to ensure sustainable growth and stability.