Molina Healthcare Inc (MOH)

Financial leverage ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Total assets	US$ in thousands	14,892,000	12,314,000	12,209,000	9,532,000	6,787,000
Total stockholders’ equity	US$ in thousands	4,215,000	2,964,000	2,630,000	2,096,000	1,960,000
Financial leverage ratio		3.53	4.15	4.64	4.55	3.46

December 31, 2023 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $14,892,000K ÷ $4,215,000K
= 3.53

The financial leverage ratio of Molina Healthcare Inc has exhibited fluctuations over the past five years. A higher financial leverage ratio indicates a larger proportion of debt in the company's capital structure compared to equity.

In 2023, the financial leverage ratio decreased to 3.53 from the previous year's 4.15, suggesting a reduction in the company's reliance on debt financing in relation to equity. This could be a positive sign as lower leverage ratios indicate lower financial risk and potentially better financial health.

The ratio had shown an increasing trend from 2019 to 2021, reaching a peak of 4.64 in 2021. This escalation could indicate the company's increasing reliance on debt to fund its operations or growth initiatives during this period.

However, the subsequent decrease in the financial leverage ratio in 2023 suggests a potential shift towards a more balanced capital structure with a lower level of debt relative to equity. It is essential for investors and stakeholders to monitor these changes in the financial leverage ratio to understand Molina Healthcare Inc's risk profile and capital management strategies.