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.