Northern Oil & Gas Inc (NOG)

Financial leverage ratio

Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Total assets US$ in thousands 4,484,260 4,304,670 3,664,750 3,342,870 2,875,180 2,471,480 2,192,240 2,024,470 1,522,870 1,244,060 1,091,810 873,243 872,089 1,025,520 1,263,270 2,237,390 1,905,460 1,902,010 1,494,390 1,395,780
Total stockholders’ equity US$ in thousands 2,047,680 1,407,790 1,415,800 1,048,070 745,260 709,097 152,650 -35,302 215,135 -157,710 -168,217 -180,682 -223,304 -83,731 140,729 1,009,010 558,643 514,114 389,649 312,760
Financial leverage ratio 2.19 3.06 2.59 3.19 3.86 3.49 14.36 — 7.08 — — — — — 8.98 2.22 3.41 3.70 3.84 4.46

December 31, 2023 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $4,484,260K ÷ $2,047,680K
= 2.19

The financial leverage ratio measures the extent to which a company relies on debt to finance its operations. A higher ratio indicates higher financial leverage, suggesting greater reliance on debt financing.

Based on the data provided, the financial leverage ratio for Northern Oil and Gas Inc. varied over the quarters. In Q4 2023, the ratio stood at 2.19, indicating that the company's financial structure was moderately leveraged at that time. This was a decrease from the previous quarter's ratio of 3.06, suggesting a reduction in the company's debt relative to its equity during that period.

In general, the trend over the quarters shows fluctuations in the financial leverage ratio, with some quarters indicating higher leverage levels (e.g., Q2 2022 with a ratio of 14.36) compared to others. It is important to note that a very high financial leverage ratio, as seen in Q2 2022, could signal potential financial risk due to excessive debt levels.

Overall, a lower financial leverage ratio, as observed in Q4 2023, may be viewed more favorably by investors and creditors as it signifies a lower reliance on debt financing. However, consistent monitoring of this ratio and understanding the reasons behind its fluctuations is crucial for assessing the company's financial health and risk management practices.