Rush Enterprises A Inc (RUSHA)

Financial leverage ratio

		Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Total assets	US$ in thousands	4,364,240	4,218,050	4,126,320	3,969,550	3,821,070	3,742,580	3,669,370	3,321,550	3,119,980	2,777,330	2,912,120	3,008,420	2,985,390	3,010,690	3,064,600	3,242,660	3,407,330	3,405,250	3,530,700	3,422,030
Total stockholders’ equity	US$ in thousands	1,870,880	1,899,610	1,868,170	1,810,670	1,744,490	1,657,460	1,611,040	1,545,040	1,466,750	1,412,780	1,360,200	1,309,230	1,268,040	1,227,070	1,186,560	1,165,480	1,159,490	1,137,250	1,113,520	1,083,420
Financial leverage ratio		2.33	2.22	2.21	2.19	2.19	2.26	2.28	2.15	2.13	1.97	2.14	2.30	2.35	2.45	2.58	2.78	2.94	2.99	3.17	3.16

December 31, 2023 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $4,364,240K ÷ $1,870,880K
= 2.33

The financial leverage ratio of Rush Enterprises A Inc has been fluctuating over the past few quarters. The ratio was relatively stable around 2.2 from March 2020 to June 2022, indicating a consistent level of leverage during that period. However, there has been an upward trend in the ratio since September 2022, reaching its peak at 3.17 in March 2019. This indicates an increase in the company's financial leverage, suggesting that the company has been relying more on debt to finance its operations.

A financial leverage ratio above 2 indicates that the company has more debt than equity in its capital structure. While higher leverage can magnify returns, it also increases financial risk, as the company needs to meet the obligations associated with the debt. Investors and creditors may view higher leverage ratios with caution, as it indicates a higher level of financial risk for the company.

Overall, the increasing trend in Rush Enterprises A Inc's financial leverage ratio suggests a shift towards a more leveraged capital structure, which could impact the company's financial stability and risk profile. Monitoring this ratio over time will be important to assess how the company manages its debt levels and overall financial health in the future.