Privia Health Group Inc (PRVA)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|
| Total assets | US$ in thousands | 999,900 | 792,813 | 686,373 |
| Total stockholders’ equity | US$ in thousands | 561,437 | 499,094 | 426,872 |
| Financial leverage ratio | 1.78 | 1.59 | 1.61 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $999,900K ÷ $561,437K
= 1.78
The financial leverage ratio measures the extent to which a company relies on debt financing compared to equity. A higher financial leverage ratio indicates higher financial risk due to a greater reliance on debt.
Privia Health Group Inc's financial leverage ratio has shown an increasing trend over the past three years, rising from 1.61 in 2021 to 1.78 in 2023. This suggests that the company has been increasingly using debt to finance its operations or growth initiatives, which can potentially amplify returns but also increase the risk of financial distress, especially during economic downturns.
The notable increase in the financial leverage ratio from 2022 to 2023 indicates a more aggressive use of debt financing by Privia Health Group Inc during the most recent fiscal year. Investors and creditors may closely monitor this trend to assess the company's ability to service its debt obligations and manage financial risks effectively in the long term.
It is essential for the management of Privia Health Group Inc to strike a balance between debt and equity financing to ensure sustainable growth and financial stability, considering the potential implications of higher leverage on the company's overall financial health and creditworthiness.
Peer comparison
Dec 31, 2023