PriceSmart Inc (PSMT)

Financial leverage ratio

		Aug 31, 2024	May 31, 2024	Feb 29, 2024	Nov 30, 2023	Aug 31, 2023	May 31, 2023	Feb 28, 2023	Nov 30, 2022	Aug 31, 2022	May 31, 2022	Feb 28, 2022	Nov 30, 2021	Aug 31, 2021	May 31, 2021	Feb 28, 2021	Nov 30, 2020	Aug 31, 2020	May 31, 2020	Feb 29, 2020	Nov 30, 2019
Total assets	US$ in thousands	2,022,690	2,020,700	2,036,780	2,029,280	2,005,610	1,933,350	1,886,170	1,887,920	1,808,400	1,791,760	1,773,330	1,789,310	1,705,790	1,631,960	1,630,840	1,678,000	1,656,820	1,574,490	1,498,290	1,524,110
Total stockholders’ equity	US$ in thousands	1,122,960	1,095,350	1,093,870	1,082,240	1,107,040	1,089,690	1,043,910	1,026,360	991,073	968,198	953,884	942,146	915,345	898,803	874,268	866,167	831,719	818,666	817,893	816,829
Financial leverage ratio		1.80	1.84	1.86	1.88	1.81	1.77	1.81	1.84	1.82	1.85	1.86	1.90	1.86	1.82	1.87	1.94	1.99	1.92	1.83	1.87

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 shown some fluctuation over the past few quarters, ranging from a low of 1.77 to a high of 1.99. The ratio indicates the level of debt financing relative to equity in the company's capital structure. A higher financial leverage ratio signifies a higher level of debt used to finance the company's operations.

In general, PriceSmart Inc has maintained a relatively stable financial leverage ratio around the range of 1.80 to 1.90 over the past few years. This suggests that the company has a moderate level of debt compared to equity. However, the slight increase in the ratio over the recent quarters may indicate a growing reliance on debt financing, which could potentially increase financial risk and interest expense for the company.

It is important for investors and analysts to closely monitor changes in the financial leverage ratio over time, as significant fluctuations could impact the company's financial stability and performance. PriceSmart Inc should carefully manage its debt levels to ensure a healthy balance between debt and equity financing to support sustainable growth and profitability.