Paychex Inc (PAYX)
Financial leverage ratio
| May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | May 31, 2020 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 10,383,100 | 10,546,400 | 9,635,200 | 9,227,200 | 8,550,700 |
| Total stockholders’ equity | US$ in thousands | 3,801,000 | 3,493,200 | 3,085,200 | 2,948,000 | 2,781,400 |
| Financial leverage ratio | 2.73 | 3.02 | 3.12 | 3.13 | 3.07 |
May 31, 2024 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $10,383,100K ÷ $3,801,000K
= 2.73
The financial leverage ratio for Paychex Inc has shown a decreasing trend over the past five years, declining from 3.07 in 2020 to 2.73 in 2024. This indicates that the company has been relying less on debt financing relative to its equity to fund its operations and investments. A lower financial leverage ratio suggests a lower level of financial risk and potential for financial distress, as the company has a stronger equity base to support its activities. It also indicates that the company may have more financial flexibility and resilience in the face of economic uncertainties. Overall, the decreasing trend in the financial leverage ratio for Paychex Inc reflects a more conservative capital structure and improved financial stability over the years.