Somnigroup International Inc. (SGI)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 4,553,900 | 4,359,800 | 4,323,400 | 3,308,600 | 3,061,800 |
| Total stockholders’ equity | US$ in thousands | 333,400 | -12,300 | 285,800 | 503,600 | 359,500 |
| Financial leverage ratio | 13.66 | — | 15.13 | 6.57 | 8.52 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $4,553,900K ÷ $333,400K
= 13.66
The financial leverage ratio measures the extent to which a company relies on debt to finance its operations. Looking at the data provided for Somnigroup International Inc., we can see that the financial leverage ratio has fluctuated over the past few years.
As of December 31, 2019, the financial leverage ratio stood at 8.52, indicating that the company had a moderate level of debt relative to its equity. By December 31, 2020, this ratio decreased to 6.57, suggesting a lower reliance on debt for financing.
However, the financial leverage ratio increased significantly by December 31, 2021, reaching 15.13. This sharp increase may indicate a substantial increase in debt compared to equity, which could potentially raise concerns about the company's financial stability and ability to meet its debt obligations.
Unfortunately, the data for December 31, 2022 is not provided (marked with "—"), making it impossible to analyze the trend for that year. Nonetheless, as of December 31, 2023, the financial leverage ratio decreased to 13.66, although it still remains at a relatively high level compared to the earlier years.
Overall, the fluctuation in Somnigroup International Inc.'s financial leverage ratio suggests varying levels of reliance on debt for financing over the years, with the significant spike in 2021 potentially signaling increased financial risk. Further analysis and context would be required to fully understand the implications of these changes in the financial leverage ratio.
Peer comparison
Dec 31, 2023