RXO Inc. (RXO)

Financial leverage ratio

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	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
Total assets	US$ in thousands	2,077	3,392,000	1,813,000	1,799,000	1,825,000	1,946,000	1,912,000	2,018,000	2,038,000	2,237,000	2,372,000	2,296,000	2,068,000
Total stockholders’ equity	US$ in thousands	1,617	1,652	579,000	582,000	594,000	590,000	589,000	585,000	589,000	1,144,000	1,199,000	1,043,000	1,070,000
Financial leverage ratio		1.28	2,053.27	3.13	3.09	3.07	3.30	3.25	3.45	3.46	1.96	1.98	2.20	1.93

December 31, 2024 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $2,077K ÷ $1,617K
= 1.28

The financial leverage ratio measures the degree to which a company relies on debt financing rather than equity financing. RXO Inc.'s financial leverage ratio has fluctuated significantly over the period under consideration. The ratio was relatively stable between December 31, 2021, and June 30, 2023, ranging from 1.93 to 3.25. From September 30, 2023, to December 31, 2023, the ratio decreased to 3.07, indicating a slight reduction in leverage.

However, a sharp increase in the financial leverage ratio was observed from March 31, 2024, where the ratio jumped to 3.09, and continued to increase dramatically to 2,053.27 by June 30, 2024. This significant spike may suggest an anomaly or data error. Subsequently, the ratio declined substantially to 1.28 by December 31, 2024, indicating a potential correction or adjustment.

Overall, RXO Inc.'s financial leverage ratio exhibited volatility and irregularities during the period, with instances of both sudden increases and decreases. It is essential for stakeholders to investigate the reasons behind these fluctuations and anomalies to understand the company's capital structure and financial risk.