Palo Alto Networks Inc (PANW)

Financial leverage ratio

		Jul 31, 2024	Jul 31, 2023	Jul 31, 2022	Jul 31, 2021	Jul 31, 2020
Total assets	US$ in thousands	19,990,900	14,501,100	12,253,600	10,241,600	9,065,400
Total stockholders’ equity	US$ in thousands	5,169,700	1,748,400	210,000	634,500	1,101,800
Financial leverage ratio		3.87	8.29	58.35	16.14	8.23

July 31, 2024 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $19,990,900K ÷ $5,169,700K
= 3.87

The financial leverage ratio of Palo Alto Networks Inc has fluctuated over the past five years, ranging from 3.87 in July 2024 to 58.35 in July 2022. This ratio measures the extent to which the company relies on debt to finance its operations and growth.

A high financial leverage ratio, such as the one observed in July 2022, indicates that the company has a higher proportion of debt in its capital structure compared to equity. This can potentially amplify returns on equity when the company is performing well, but also increases financial risk as debt obligations need to be met regardless of the company's performance.

On the contrary, a lower financial leverage ratio, as seen in July 2024, suggests a lower reliance on debt financing, which can imply a more conservative approach to capital structure and lower financial risk due to decreased debt obligations.

It is important for investors and stakeholders to closely monitor Palo Alto Networks Inc's financial leverage ratio over time to assess the company's financial health, risk appetite, and ability to fulfill its debt obligations.