Premier Inc (PINC)
Financial leverage ratio
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 3,401,450 | 3,371,490 | 3,357,130 | 3,522,900 | 2,948,520 |
| Total stockholders’ equity | US$ in thousands | 1,962,230 | 2,334,360 | 2,248,850 | 2,229,890 | 1,859,570 |
| Financial leverage ratio | 1.73 | 1.44 | 1.49 | 1.58 | 1.59 |
June 30, 2024 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $3,401,450K ÷ $1,962,230K
= 1.73
Premier Inc's financial leverage ratio has fluctuated over the past five years, ranging from 1.44 to 1.73. This ratio indicates the level of debt the company has relative to its equity. A higher financial leverage ratio suggests that the company relies more on debt to finance its operations, which can amplify returns but also increase financial risk.
The upward trend in Premier Inc's financial leverage ratio from 1.44 in 2023 to 1.73 in 2024 may indicate a shift towards more debt financing. This could be a strategic decision to fund expansion or investments that are expected to generate higher returns. However, investors and creditors may view a higher financial leverage ratio as a sign of increased risk, as the company has a higher debt burden to manage.
On the other hand, the fluctuation in the ratio over the past five years, with some ups and downs, suggests a varying capital structure and strategic financing decisions by the company. It is important to monitor this ratio closely to assess the company's ability to meet its debt obligations and manage financial risk effectively. Further analysis of Premier Inc's overall financial health and performance metrics would provide a more comprehensive understanding of the implications of its financial leverage ratio.
Peer comparison
Jun 30, 2024