Patrick Industries Inc (PATK)

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	2,562,450	2,655,940	2,707,030	2,816,830	2,782,470	2,896,650	3,024,830	2,971,380	2,650,730	2,358,460	2,224,710	1,834,880	1,753,440	1,574,940	1,492,800	1,522,160	1,470,990	1,451,130	1,330,910	1,355,180
Total stockholders’ equity	US$ in thousands	1,045,340	1,031,300	997,422	969,822	955,169	946,676	897,590	799,972	767,557	692,048	643,271	595,275	559,441	525,829	493,268	495,376	497,481	479,938	458,617	429,089
Financial leverage ratio		2.45	2.58	2.71	2.90	2.91	3.06	3.37	3.71	3.45	3.41	3.46	3.08	3.13	3.00	3.03	3.07	2.96	3.02	2.90	3.16

December 31, 2023 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $2,562,450K ÷ $1,045,340K
= 2.45

The financial leverage ratio measures the extent to which a company is using debt to finance its operations and is calculated by dividing total assets by total equity.

Analyzing the financial leverage ratio of Patrick Industries, Inc. over the past eight quarters shows a declining trend from Q1 2022 to Q4 2023. The ratio decreased from 3.71 in Q1 2022 to 2.45 in Q4 2023, indicating a reduction in the company's reliance on debt to fund its assets over this period.

A decreasing financial leverage ratio often suggests improved financial stability and reduced risk, as the company is relying less on borrowed funds to support its operations. However, it is important to note that a very low financial leverage ratio may also indicate underutilization of debt which could potentially limit the company's growth opportunities.

Overall, the decreasing trend in Patrick Industries' financial leverage ratio indicates a positive development in terms of capital structure and risk management.