Select Medical Holdings (SEM)
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 | 7,689,630 | 7,684,010 | 7,701,870 | 7,699,740 | 7,665,290 | 7,554,980 | 7,551,660 | 7,535,940 | 7,360,170 | 7,899,470 | 7,956,380 | 7,920,780 | 7,655,400 | 7,659,880 | 7,468,460 | 7,115,570 | 7,340,290 | 7,154,760 | 7,106,940 | 7,021,490 |
| Total stockholders’ equity | US$ in thousands | 1,288,300 | 1,267,810 | 1,246,040 | 1,170,450 | 1,121,920 | 1,105,600 | 1,071,410 | 1,138,140 | 1,109,980 | 1,145,500 | 1,234,220 | 1,145,980 | 1,060,480 | 1,038,590 | 992,883 | 808,638 | 770,972 | 754,718 | 846,009 | 802,031 |
| Financial leverage ratio | 5.97 | 6.06 | 6.18 | 6.58 | 6.83 | 6.83 | 7.05 | 6.62 | 6.63 | 6.90 | 6.45 | 6.91 | 7.22 | 7.38 | 7.52 | 8.80 | 9.52 | 9.48 | 8.40 | 8.75 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $7,689,630K ÷ $1,288,300K
= 5.97
Select Medical Holdings Corporation's financial leverage ratio has shown a declining trend over the past eight quarters, indicating a reduction in the company's reliance on debt to finance its operations. The ratio decreased from 6.83 in Q4 2022 to 5.97 in Q4 2023, reflecting an improvement in the company's ability to meet its financial obligations with its own equity rather than borrowed funds.
The downward trajectory of the financial leverage ratio suggests that Select Medical Holdings has been successful in optimizing its capital structure and reducing its overall financial risk. A lower leverage ratio typically signals greater financial stability and flexibility for the company, as it indicates a lower proportion of debt in relation to equity.
However, it is important to note that even though the financial leverage ratio has been declining, it still remains above 1, indicating that the company has more debt than equity in its capital structure. While reducing leverage can be positive, it is essential for the company to strike a balance between using debt for growth and maintaining a healthy level of equity to support its operations and investments in the long term.
Peer comparison
Dec 31, 2023