Universal Display (OLED)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 1,668,960 | 1,532,820 | 1,466,920 | 1,269,230 | 1,120,160 |
| Total stockholders’ equity | US$ in thousands | 1,447,230 | 1,275,370 | 1,099,910 | 912,714 | 811,449 |
| Financial leverage ratio | 1.15 | 1.20 | 1.33 | 1.39 | 1.38 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $1,668,960K ÷ $1,447,230K
= 1.15
The financial leverage ratio for Universal Display Corp. has shown a decreasing trend over the past five years, indicating improved financial stability and decreased reliance on debt financing. It decreased from 1.38 in 2019 to 1.15 in 2023. This suggests that the company has been progressively using less debt to finance its operations relative to its equity.
A financial leverage ratio below 1 implies that the company relies more on equity financing, which can be seen as a positive sign as it reduces the financial risk associated with high levels of debt. Universal Display Corp.'s decreasing trend in this ratio indicates a prudent financial management strategy aimed at reducing financial risk and enhancing long-term sustainability. Additionally, the decreasing trend may also indicate improved profitability and cash flow generation, allowing the company to rely less on debt financing to fund its operations.
Peer comparison
Dec 31, 2023