Penumbra Inc (PEN)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 1,556,300 | 1,370,890 | 1,244,250 | 822,983 | 665,901 |
| Total stockholders’ equity | US$ in thousands | 1,178,940 | 998,858 | 953,927 | 641,498 | 485,892 |
| Financial leverage ratio | 1.32 | 1.37 | 1.30 | 1.28 | 1.37 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $1,556,300K ÷ $1,178,940K
= 1.32
Penumbra Inc's financial leverage ratio has shown fluctuations over the past five years. The ratio has ranged from 1.28 in 2020 to 1.37 in both 2019 and 2022, with a downward trend in 2021 at 1.30 before increasing again to 1.32 in 2023.
A financial leverage ratio above 1 indicates that the company relies more on debt financing than equity financing to support its operations and growth. The decreasing trend from 2019 to 2020 suggested a potential reduction in debt reliance, but this was reversed in the subsequent years.
Overall, the ratio of around 1.3-1.4 indicates moderate financial leverage, which can have both benefits and risks. While debt can magnify returns for shareholders during profitable times, it also increases the company's financial risk and interest expenses. It would be prudent for Penumbra Inc to monitor and manage its financial leverage to ensure a healthy balance between debt and equity financing.
Peer comparison
Dec 31, 2023