Monster Beverage Corp (MNST)

Financial leverage ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Total assets	US$ in thousands	9,686,520	8,293,100	7,804,780	6,202,720	5,150,350
Total stockholders’ equity	US$ in thousands	8,228,740	7,025,040	6,566,950	5,160,860	4,171,280
Financial leverage ratio		1.18	1.18	1.19	1.20	1.23

December 31, 2023 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $9,686,520K ÷ $8,228,740K
= 1.18

The financial leverage ratio for Monster Beverage Corp. has been relatively stable over the past five years, ranging between 1.18 and 1.23. This ratio indicates that the company relies on a mix of debt and equity to finance its operations and assets. A financial leverage ratio of 1.18 to 1.23 suggests that for every dollar of equity, the company has approximately $1.18 to $1.23 in debt.

While a financial leverage ratio above 1 indicates that the company has more debt than equity, Monster Beverage Corp. has maintained a moderate level of leverage, which can be advantageous for achieving higher returns on equity but also entails higher financial risk. The consistency in the ratio over the years suggests that the company has maintained a steady balance in its capital structure. Furthermore, the slight decrease in the ratio from 1.23 in 2019 to 1.18 in 2023 may indicate a slight reduction in debt relative to equity, possibly reflecting a strategic shift towards a more conservative financing approach.

Overall, the financial leverage ratio analysis of Monster Beverage Corp. indicates a stable and balanced mix of debt and equity in its capital structure, which is crucial for assessing the company's financial risk and efficiency in utilizing its financial resources.