Ormat Technologies Inc (ORA)

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 5,208,280 5,010,810 5,010,640 5,015,270 4,611,580 4,524,530 4,541,980 4,414,190 4,425,680 4,359,370 3,818,550 3,859,210 3,888,990 3,520,950 3,418,380 3,445,610 3,250,490 3,259,490 3,193,780 3,143,210
Total stockholders’ equity US$ in thousands 2,315,430 2,278,830 2,254,390 2,184,540 1,867,570 1,846,500 1,832,630 1,870,670 1,855,000 1,833,380 1,825,080 1,816,610 1,805,980 1,439,740 1,428,400 1,409,060 1,392,420 1,380,730 1,369,560 1,340,350
Financial leverage ratio 2.25 2.20 2.22 2.30 2.47 2.45 2.48 2.36 2.39 2.38 2.09 2.12 2.15 2.45 2.39 2.45 2.33 2.36 2.33 2.35

December 31, 2023 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $5,208,280K ÷ $2,315,430K
= 2.25

The financial leverage ratio measures the extent to which a company relies on debt to finance its operations and growth. A high financial leverage ratio indicates a relatively higher level of debt compared to equity, which can increase financial risk but also potentially boost returns.

Ormat Technologies Inc's financial leverage ratio has shown some fluctuation over the past eight quarters. In Q4 2023, the ratio stood at 2.25, indicating that the company had $2.25 of debt for every dollar of equity. This was a slight increase from the previous quarter's ratio of 2.20. The trend in the financial leverage ratio over the four quarters in 2023 suggests that the company's reliance on debt fluctuated but remained within a relatively narrow range, with a peak of 2.30 in Q1 and a low of 2.20 in Q3.

Comparing the 2023 ratios to those of the previous year, it is evident that Ormat Technologies Inc's financial leverage has decreased, as the ratios in 2022 were consistently higher, with values ranging from 2.36 to 2.48. This indicates that the company may have reduced its reliance on debt for financing its operations and investments.

Overall, the trend in Ormat Technologies Inc's financial leverage ratio reflects changes in the company's capital structure and financing decisions. A decreasing trend may suggest a shift towards a more conservative financial strategy with less dependence on debt, which could potentially reduce financial risk in the long run.