Paycom Soft (PAYC)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 4,197,540 | 3,902,510 | 3,215,140 | 2,607,910 | 2,486,920 |
| Total stockholders’ equity | US$ in thousands | 1,303,040 | 1,182,610 | 893,714 | 655,643 | 526,628 |
| Financial leverage ratio | 3.22 | 3.30 | 3.60 | 3.98 | 4.72 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $4,197,540K ÷ $1,303,040K
= 3.22
The financial leverage ratio of Paycom Software Inc has shown a declining trend over the past five years, indicating a reduction in the company's reliance on debt to finance its operations and investments. The ratio decreased from 4.72 in 2019 to 3.22 in 2023. This suggests that the company has been able to improve its financial position by reducing its debt levels relative to its equity.
A lower financial leverage ratio is generally favorable as it signifies lower financial risk and greater financial stability. Paycom Software Inc's decreasing trend in this ratio reflects a more conservative approach towards capital structure and suggests a stronger financial position compared to previous years.
Overall, the declining financial leverage ratio indicates that Paycom Software Inc has been actively managing its debt levels and working towards a more balanced and sustainable capital structure.
Peer comparison
Dec 31, 2023