Simply Good Foods Co (SMPL)

Financial leverage ratio

		Feb 24, 2024	Nov 25, 2023	Aug 26, 2023	May 27, 2023	Feb 25, 2023	Nov 26, 2022	Aug 27, 2022	May 28, 2022	Feb 26, 2022	Nov 27, 2021	Aug 28, 2021	May 29, 2021	Feb 27, 2021	Nov 28, 2020	Aug 29, 2020	May 30, 2020	Feb 29, 2020	Nov 30, 2019	Aug 31, 2019	May 25, 2019
Total assets	US$ in thousands	2,147,570	2,115,060	2,097,080	2,080,000	2,088,680	2,093,060	2,094,250	2,114,660	2,087,900	2,043,340	2,052,220	2,039,120	2,021,520	2,015,220	2,008,440	2,040,140	2,001,350	2,016,060	1,141,650	1,124,610
Total stockholders’ equity	US$ in thousands	1,647,480	1,607,180	1,571,100	1,530,820	1,491,920	1,463,360	1,438,660	1,437,320	1,401,050	1,209,610	1,188,800	1,168,410	1,160,140	1,183,310	1,139,330	1,173,730	1,123,410	1,072,410	712,868	753,732
Financial leverage ratio		1.30	1.32	1.33	1.36	1.40	1.43	1.46	1.47	1.49	1.69	1.73	1.75	1.74	1.70	1.76	1.74	1.78	1.88	1.60	1.49

February 24, 2024 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $2,147,570K ÷ $1,647,480K
= 1.30

The financial leverage ratio of Simply Good Foods Co has been showing a generally increasing trend over the past few quarters, indicating an increase in the company's reliance on debt to finance its operations and growth. The ratio has steadily risen from 1.30 in February 2020 to 1.88 in November 2019, with some fluctuations in between.

A financial leverage ratio above 1 suggests that the company has more debt than equity in its capital structure. In this case, the ratio consistently exceeding 1 indicates that Simply Good Foods Co has been relying more on debt to fund its operations and investments.

The significant increase in the financial leverage ratio from 1.30 in February 2020 to 1.88 in November 2019 may raise concerns about the company's financial risk and ability to meet its debt obligations, as higher leverage levels usually imply higher financial risk. Investors and stakeholders may closely monitor the company's ability to manage its debt levels and generate sufficient cash flow to service its debt.

Overall, the trend in Simply Good Foods Co's financial leverage ratio suggests a growing reliance on debt financing, which could impact the company's financial stability and risk profile. As such, the company may need to carefully manage its debt levels and explore avenues for improving its financial position to ensure sustainable growth and profitability in the long term.