Phibro Animal Health Corporation (PAHC)

Financial leverage ratio

		Jun 30, 2024	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020
Total assets	US$ in thousands	982,184	971,397	931,699	841,325	784,100
Total stockholders’ equity	US$ in thousands	256,641	282,509	262,442	238,529	188,204
Financial leverage ratio		3.83	3.44	3.55	3.53	4.17

June 30, 2024 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $982,184K ÷ $256,641K
= 3.83

The financial leverage ratio of Phibro Animal Health Corporation has shown fluctuations over the past five years, ranging from 3.44 to 4.17. The ratio indicates the extent to which the company relies on debt to finance its operations and assets.

The trend suggests that the company has been using a higher proportion of debt in its capital structure, as evidenced by the increasing ratios from 2020 to 2021, followed by a decrease in 2023 before rising again in 2024. A higher financial leverage ratio can magnify returns on equity when operating income exceeds the cost of debt, but it also increases financial risk, as the company must meet debt obligations regardless of business performance.

Overall, the trend in Phibro Animal Health Corporation's financial leverage ratio shows fluctuations, indicating the company's varying levels of reliance on debt financing over the years. Investors and stakeholders should closely monitor this ratio to assess the company's leverage and financial risk.