Paylocity Holdng (PCTY)

Financial leverage ratio

		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	Dec 31, 2019	Sep 30, 2019
Total assets	US$ in thousands	4,245,460	4,953,040	4,492,720	3,646,780	3,695,680	4,193,520	3,937,770	3,095,110	4,809,010	5,079,240	2,588,590	3,811,540	2,414,880	2,663,550	2,850,960	2,004,850	1,985,650	2,256,930	2,323,430	1,598,470
Total stockholders’ equity	US$ in thousands	1,033,060	1,099,410	986,773	892,639	842,863	768,746	677,767	610,846	613,463	565,419	506,693	467,573	476,930	454,609	408,218	386,820	392,908	374,375	331,564	309,459
Financial leverage ratio		4.11	4.51	4.55	4.09	4.38	5.46	5.81	5.07	7.84	8.98	5.11	8.15	5.06	5.86	6.98	5.18	5.05	6.03	7.01	5.17

June 30, 2024 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $4,245,460K ÷ $1,033,060K
= 4.11

The financial leverage ratio of Paylocity Holdng has shown some volatility over the past few quarters, ranging from a low of 4.09 to a high of 8.98. This ratio measures the extent to which the company is using debt to finance its operations and investments. A higher financial leverage ratio indicates that a larger portion of the company's assets is funded by debt, which can amplify returns but also increase financial risk.

In recent quarters, the financial leverage ratio has generally been on the higher side, exceeding 5 consistently. This suggests that Paylocity Holdng has been relying more on debt as a source of capital, potentially to fund growth initiatives or support operations. However, the ratio has also shown significant fluctuations, indicating potential shifts in the company's capital structure or debt management strategies.

It is important for investors and stakeholders to closely monitor changes in the financial leverage ratio, as excessively high levels of leverage can expose a company to financial distress, especially during economic downturns or periods of increased interest rates. A thorough analysis of the underlying reasons for changes in the financial leverage ratio, along with an assessment of the company's overall financial health and ability to service its debt obligations, is crucial for evaluating the sustainability of Paylocity Holdng's capital structure.