Qorvo Inc (QRVO)
Financial leverage ratio
| Mar 31, 2024 | Mar 31, 2023 | Mar 31, 2022 | Mar 31, 2021 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 6,554,640 | 6,691,900 | 7,509,070 | 7,221,470 | 6,560,680 |
| Total stockholders’ equity | US$ in thousands | 3,556,370 | 3,902,790 | 4,553,220 | 4,629,420 | 4,292,660 |
| Financial leverage ratio | 1.84 | 1.71 | 1.65 | 1.56 | 1.53 |
March 31, 2024 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $6,554,640K ÷ $3,556,370K
= 1.84
The financial leverage ratio of Qorvo Inc has exhibited a general increasing trend over the past five years. This ratio measures the proportion of a company's debt to its equity, indicating the level of financial risk undertaken by the company.
The ratio increased from 1.53 in March 2020 to 1.84 in March 2024, signifying a higher reliance on debt in the company's capital structure. This trajectory suggests that Qorvo Inc has been increasingly leveraging debt to finance its operations or growth initiatives over the years.
A higher financial leverage ratio can potentially amplify returns on equity when the return on assets is higher than the cost of debt. However, it also magnifies the risks, as higher debt levels increase interest payments and financial obligations, leading to greater exposure to fluctuations in interest rates and economic downturns.
In conclusion, the upward trend in Qorvo Inc's financial leverage ratio indicates a growing debt burden relative to equity, emphasizing the company's need to effectively manage debt levels and associated risks in order to maintain financial stability and sustainable growth in the long term.
Peer comparison
Mar 31, 2024