Simply Good Foods Co (SMPL)

Financial leverage ratio

		Aug 31, 2024	Aug 26, 2023	Aug 27, 2022	Aug 28, 2021	Aug 29, 2020
Total assets	US$ in thousands	2,436,140	2,097,080	2,094,250	2,052,220	2,008,440
Total stockholders’ equity	US$ in thousands	1,727,490	1,571,100	1,438,660	1,188,800	1,139,330
Financial leverage ratio		1.41	1.33	1.46	1.73	1.76

August 31, 2024 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $2,436,140K ÷ $1,727,490K
= 1.41

The financial leverage ratio of Simply Good Foods Co has fluctuated over the past five years, ranging from 1.33 to 1.76. The ratio indicates the extent to which the company relies on debt financing relative to equity to fund its operations and investments. A higher financial leverage ratio suggests a greater reliance on debt, which can amplify returns but also increase financial risk. In this case, the ratio peaked in 2020 at 1.76, indicating a higher level of debt in the company's capital structure. However, in the following years, the ratio decreased, reaching its lowest point in 2023 at 1.33 before slightly increasing to 1.41 in the most recent year. This trend suggests that Simply Good Foods Co has reduced its reliance on debt financing compared to equity over the years, potentially improving its financial stability and flexibility.