Micron Technology Inc (MU)

Financial leverage ratio

		Aug 29, 2024	Aug 31, 2023	Sep 1, 2022	Sep 2, 2021	Sep 3, 2020
Total assets	US$ in thousands	69,416,000	64,254,000	66,283,000	58,849,000	53,678,000
Total stockholders’ equity	US$ in thousands	45,131,000	44,120,000	49,907,000	43,933,000	38,996,000
Financial leverage ratio		1.54	1.46	1.33	1.34	1.38

August 29, 2024 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $69,416,000K ÷ $45,131,000K
= 1.54

The financial leverage ratio for Micron Technology Inc has shown some fluctuation over the past five years. As of August 29, 2024, the ratio stands at 1.54, indicating that the company's reliance on debt to finance its operations has increased compared to the previous year. In general, a higher financial leverage ratio suggests a greater proportion of debt in the company's capital structure, which can amplify both returns and risks for shareholders.

Looking at the trend over the past five years, there was a notable increase in the financial leverage ratio from 1.33 in September 2022 to 1.54 in August 2024. This rise may raise concerns about the company's ability to manage its debt levels effectively. However, it is essential to consider other factors such as interest rates, profitability, and the company's overall financial health when assessing the implications of this trend.

While a higher financial leverage ratio can potentially enhance returns for shareholders, it also exposes the company to higher financial risk, especially in times of economic uncertainty or rising interest rates. Therefore, investors and stakeholders should monitor Micron Technology Inc's financial leverage ratio closely and consider its implications in conjunction with other financial metrics to assess the company's financial stability and growth prospects.