Progress Software Corporation (PRGS)
Financial leverage ratio
| Nov 30, 2024 | Nov 30, 2023 | Nov 30, 2022 | Nov 30, 2021 | Nov 30, 2020 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 2,526,970 | 1,602,780 | 1,411,480 | 1,363,540 | 1,041,780 |
| Total stockholders’ equity | US$ in thousands | 438,788 | 459,715 | 398,504 | 412,489 | 346,013 |
| Financial leverage ratio | 5.76 | 3.49 | 3.54 | 3.31 | 3.01 |
November 30, 2024 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $2,526,970K ÷ $438,788K
= 5.76
The financial leverage ratio of Progress Software Corporation has shown an upward trend from 3.01 in November 2020 to 5.76 in November 2024. This indicates an increase in the company's reliance on debt financing to fund its operations and growth. The ratio surpassed 3.0 in the first year analyzed, suggesting that the company's debt levels exceeded its equity. By November 2024, the ratio had significantly increased, reaching a level that signifies a high level of financial leverage and potential risk.
This escalation in the financial leverage ratio could be due to various factors such as aggressive expansion strategies, acquisitions financed through debt, or a decline in equity levels. It is worth noting that a high financial leverage ratio can amplify both returns and risks for the company and its shareholders. Progress Software Corporation may face challenges in servicing its debt obligations in the future, especially if its earnings and cash flows are insufficient to cover these obligations.
Investors and stakeholders should closely monitor the company's financial position and leverage levels to assess the potential risks associated with its capital structure. Further analysis of the company's income statement, balance sheet, and cash flow statement would provide additional insights into the drivers behind the increasing financial leverage ratio and its implications for Progress Software Corporation's financial health.
Peer comparison
Nov 30, 2024