Paycom Soft (PAYC)

Financial leverage ratio

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Total assets	US$ in thousands	5,859,900	4,197,540	3,902,510	3,215,140	2,607,910
Total stockholders’ equity	US$ in thousands	1,575,900	1,303,040	1,182,610	893,714	655,643
Financial leverage ratio		3.72	3.22	3.30	3.60	3.98

December 31, 2024 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $5,859,900K ÷ $1,575,900K
= 3.72

The financial leverage ratio of Paycom Soft has shown a declining trend over the past five years. It decreased from 3.98 on December 31, 2020, to 3.60 on December 31, 2021, further declining to 3.30 on December 31, 2022, and then to 3.22 on December 31, 2023. However, there was a slight increase to 3.72 on December 31, 2024.

This downward trend in the financial leverage ratio indicates that the company has been reducing its reliance on debt to finance its operations and investments. Lower leverage ratios suggest a lower level of financial risk and may indicate a stronger financial position. However, the increase in the ratio in 2024 suggests that the company may have taken on more debt that year.

Overall, it is important for stakeholders to monitor changes in the financial leverage ratio to assess the company's risk profile and financial stability. A decreasing trend can be positive, but it is also essential to consider the reasons behind any fluctuations in the ratio.