Penn National Gaming Inc (PENN)

Financial leverage ratio

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 Jun 30, 2019 Mar 31, 2019
Total assets US$ in thousands 16,064,200 16,168,600 17,028,000 17,040,000 17,502,100 17,535,100 17,880,800 18,071,100 16,872,100 15,748,700 15,078,200 14,888,200 14,667,300 14,812,000 14,321,500 13,938,400 14,194,500 14,318,000 14,321,500 13,498,200
Total stockholders’ equity US$ in thousands 3,202,100 3,482,600 4,210,300 4,176,300 3,597,700 3,617,100 3,766,800 3,953,500 4,097,800 3,071,900 2,958,300 2,756,300 2,656,200 2,633,700 1,506,200 1,278,400 1,852,700 1,939,800 1,891,910 1,861,820
Financial leverage ratio 5.02 4.64 4.04 4.08 4.86 4.85 4.75 4.57 4.12 5.13 5.10 5.40 5.52 5.62 9.51 10.90 7.66 7.38 7.57 7.25

December 31, 2023 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $16,064,200K ÷ $3,202,100K
= 5.02

Financial leverage ratio measures the extent to which a company relies on debt to finance its operations and growth. It is calculated by dividing total assets by total equity. A higher financial leverage ratio indicates higher financial risk due to higher debt levels.

Based on the data provided for PENN Entertainment Inc, the financial leverage ratio has fluctuated over the past eight quarters. In Q4 2023, the ratio stood at 5.02, which was the highest among the reported periods, indicating a significant reliance on debt to fund the company's assets. This could potentially increase the financial risk for the company as a higher debt level may lead to higher interest expense and potential repayment challenges.

In comparison, the financial leverage ratio was relatively lower in Q2 2023 and Q1 2023 at 4.04 and 4.08, respectively. Although still indicating a considerable debt-to-equity ratio, the lower values suggest a reduced level of financial risk compared to Q4 2023. Similarly, in Q3 2023, the ratio was 4.64, reflecting a slightly higher leverage compared to Q2 and Q1 2023.

Looking further back, the financial leverage ratio was relatively stable in Q4 2022, Q3 2022, Q2 2022, and Q1 2022, ranging between 4.57 and 4.86. These values indicate a consistent reliance on debt financing during these periods, with no significant spikes in financial risk.

Overall, monitoring PENN Entertainment Inc's financial leverage ratio is crucial for assessing the company's capital structure and evaluating its risk exposure. It is essential for investors and stakeholders to track these trends to understand how the company is managing its debt levels and the potential implications for its financial health and stability.