Photronics Inc (PLAB)

Financial leverage ratio

		Oct 31, 2023	Oct 31, 2022	Oct 31, 2021	Oct 31, 2020	Oct 31, 2019
Total assets	US$ in thousands	1,526,220	1,315,830	1,294,200	1,188,180	1,118,660
Total stockholders’ equity	US$ in thousands	975,008	831,527	823,692	804,962	769,892
Financial leverage ratio		1.57	1.58	1.57	1.48	1.45

October 31, 2023 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $1,526,220K ÷ $975,008K
= 1.57

The financial leverage ratio measures a company's use of debt to finance its operations and the extent to which it relies on debt capital. Photronics, Inc.'s financial leverage ratio has shown a relatively stable trend over the past five years, ranging from 1.45 in 2019 to 1.58 in 2022.

The slight fluctuations in the financial leverage ratio indicate that the company has maintained a relatively consistent level of leverage in its capital structure. A higher financial leverage ratio suggests that a company is utilizing more debt financing compared to equity, which can amplify returns but also increase the risk.

It is important for investors and creditors to monitor changes in the financial leverage ratio as it provides insights into the company's risk exposure and financial stability. In Photronics, Inc.'s case, the consistent range of the financial leverage ratio over the years suggests a stable debt-to-equity mix in its capital structure, providing a degree of financial stability while leveraging the benefits of debt financing.