Paycom Soft (PAYC)

Financial leverage ratio

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	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
Total assets	US$ in thousands	5,859,900	3,492,530	4,312,740	4,733,260	4,197,540	3,856,100	3,951,340	4,241,620	3,902,510	3,314,570	4,891,700	5,444,570	3,215,140	4,218,040	3,233,090	3,406,770	2,607,910	2,485,200	1,921,500	2,309,720
Total stockholders’ equity	US$ in thousands	1,575,900	1,464,650	1,426,530	1,438,060	1,303,040	1,421,310	1,406,680	1,334,470	1,182,610	1,076,380	994,139	1,009,020	893,714	825,341	792,256	745,476	655,643	632,399	585,853	599,788
Financial leverage ratio		3.72	2.38	3.02	3.29	3.22	2.71	2.81	3.18	3.30	3.08	4.92	5.40	3.60	5.11	4.08	4.57	3.98	3.93	3.28	3.85

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 displayed fluctuations over the observation period, ranging from a low of 2.38 to a high of 5.40. The ratio indicates the proportion of the company's debt to its equity, reflecting the level of financial risk borne by the company. A higher ratio signifies a greater reliance on debt financing, which may lead to increased financial risk but also potential for higher returns. On the other hand, a lower ratio indicates a more conservative capital structure with less debt and lower financial risk.

Analyzing the trend, it is observed that the financial leverage ratio of Paycom Soft increased from March 31, 2020, to a peak of 5.40 on March 31, 2022, indicating a significant rise in the company's debt relative to equity during this period. Subsequently, the ratio showed fluctuations, declining to 2.38 by September 30, 2024. This decrease suggests a shift towards a more conservative capital structure with reduced reliance on debt financing. However, the ratio increased slightly to 3.72 by December 31, 2024, indicating a slight uptick in debt relative to equity.

Overall, the fluctuating trend in Paycom Soft's financial leverage ratio indicates variability in the company's capital structure and financial risk profile over the observation period. It is essential for stakeholders to closely monitor these changes to assess the company's ability to manage its debt levels effectively and sustain financial stability.