Perrigo Company PLC (PRGO)

Financial leverage ratio

Dec 31, 2024 Sep 30, 2024 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
Total assets US$ in thousands 9,647,700 11,203,200 10,397,300 10,640,300 10,809,100 10,758,300 10,964,700 10,954,900 11,017,300 10,677,500 10,919,600 10,389,500 10,425,700 10,915,900 11,230,300 11,324,800 11,488,400 11,576,000 12,128,300 11,400,700
Total stockholders’ equity US$ in thousands 4,319,400 4,566,000 4,545,300 4,687,000 4,767,900 4,738,100 4,848,600 4,833,900 4,842,100 4,602,700 4,849,800 5,104,500 5,151,700 5,182,400 5,511,100 5,558,000 5,655,100 5,820,300 5,910,400 5,786,400
Financial leverage ratio 2.23 2.45 2.29 2.27 2.27 2.27 2.26 2.27 2.28 2.32 2.25 2.04 2.02 2.11 2.04 2.04 2.03 1.99 2.05 1.97

December 31, 2024 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $9,647,700K ÷ $4,319,400K
= 2.23

The financial leverage ratio of Perrigo Company PLC has shown a consistent upward trend over the period from March 31, 2020, to December 31, 2024. The ratio has increased from 1.97 as of March 31, 2020, to 2.23 as of December 31, 2024. This indicates that the company's reliance on debt to finance its operations and investments has increased over the years.

A higher financial leverage ratio suggests that a larger proportion of the company's assets are financed through debt rather than equity. While taking on debt can provide tax advantages and leverage potential returns, it also increases financial risk, especially in times of economic downturn or rising interest rates.

It is essential for investors and stakeholders to monitor Perrigo's financial leverage ratio closely to assess the company's ability to meet its debt obligations and manage its financial risk effectively. Additionally, a rising leverage ratio may indicate a need for the company to carefully evaluate its capital structure and debt management strategies to maintain financial stability.