PriceSmart Inc (PSMT)

Financial leverage ratio

		Aug 31, 2024	Aug 31, 2023	Aug 31, 2022	Aug 31, 2021	Aug 31, 2020
Total assets	US$ in thousands	2,022,690	2,005,610	1,808,400	1,705,790	1,656,820
Total stockholders’ equity	US$ in thousands	1,122,960	1,107,040	991,073	915,345	831,719
Financial leverage ratio		1.80	1.81	1.82	1.86	1.99

August 31, 2024 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $2,022,690K ÷ $1,122,960K
= 1.80

The financial leverage ratio of PriceSmart Inc has exhibited a decreasing trend over the past five years, declining from 1.99 in August 2020 to 1.80 in August 2024. This indicates that the company has been gradually reducing its reliance on debt financing compared to equity financing over the years. A lower financial leverage ratio suggests a lower level of financial risk and a stronger equity position, which may be viewed positively by investors and creditors. It is important to monitor changes in this ratio to assess the company's capital structure and financial health.