Sitime Corporation (SITM)

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 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020
Total assets US$ in thousands 884,959 877,903 878,555 942,623 951,683 747,687 745,504 746,428 750,616 738,054 733,963 698,048 678,209 367,443 334,383 324,076 136,011 127,697 155,476 128,214
Total stockholders’ equity US$ in thousands 699,719 696,235 692,512 696,210 708,052 710,342 708,267 713,660 708,480 694,442 680,284 653,874 632,497 325,997 303,926 295,269 109,880 102,823 99,569 58,014
Financial leverage ratio 1.26 1.26 1.27 1.35 1.34 1.05 1.05 1.05 1.06 1.06 1.08 1.07 1.07 1.13 1.10 1.10 1.24 1.24 1.56 2.21

December 31, 2024 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $884,959K ÷ $699,719K
= 1.26

Sitime Corporation's financial leverage ratio demonstrates a fluctuating trend over the analyzed periods. The ratio indicates the extent to which the company relies on debt financing in relation to its equity. A higher financial leverage ratio suggests that a company is using more debt to finance its operations, which can increase financial risk but also amplify returns for shareholders in favorable conditions.

Analyzing the data provided, Sitime Corporation's financial leverage ratio ranged from a high of 2.21 on March 31, 2020, to a low of 1.05 on March 31, 2023. This significant decrease in the ratio indicates a reduction in the company's reliance on debt for funding its operations. However, the ratio saw a slight uptick to 1.34 by December 31, 2023, before settling at 1.26 by the end of December 31, 2024.

Overall, the trend in Sitime Corporation's financial leverage ratio suggests a shift towards a more balanced capital structure, with the company potentially seeking a more conservative approach to managing its debt levels. This could be attributed to strategic decisions aimed at reducing financial risk and enhancing long-term stability in the face of changing market conditions or growth strategies.