Sitime Corporation (SITM)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 951,683 | 750,616 | 678,209 | 136,011 | 123,391 |
| Total stockholders’ equity | US$ in thousands | 708,052 | 708,480 | 632,497 | 109,880 | 62,140 |
| Financial leverage ratio | 1.34 | 1.06 | 1.07 | 1.24 | 1.99 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $951,683K ÷ $708,052K
= 1.34
The financial leverage ratio of SiTime Corp has exhibited fluctuations over the past five years. The ratio indicates the company's level of debt relative to its equity capital.
In 2019, the financial leverage ratio was relatively high at 1.99, suggesting a higher proportion of debt in the company's capital structure compared to equity. This level of leverage may indicate increased financial risk.
However, by 2020, the ratio decreased significantly to 1.24, signaling a reduction in the company's reliance on debt financing. This could potentially indicate a more conservative approach to capital structure and a decrease in financial risk.
In 2021 and 2022, the financial leverage ratio remained relatively stable at 1.07 and 1.06, respectively, implying a consistent balance between debt and equity in SiTime Corp's capital structure.
Notably, in 2023, the financial leverage ratio increased to 1.34, indicating a higher reliance on debt financing compared to the previous two years. This uptick may suggest a shift towards greater financial leverage and potential increased financial risk for the company.
Overall, it is essential for stakeholders to monitor the company's financial leverage ratio closely to assess its risk profile and evaluate the potential impact on its financial stability and performance.
Peer comparison
Dec 31, 2023