Sun Country Airlines Holdings Inc (SNCY)

Financial leverage ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021
Total assets	US$ in thousands	1,623,630	1,524,410	1,380,420
Total stockholders’ equity	US$ in thousands	514,403	492,712	490,589
Financial leverage ratio		3.16	3.09	2.81

December 31, 2023 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $1,623,630K ÷ $514,403K
= 3.16

Based on the financial leverage ratios for Sun Country Airlines Holdings Inc over the past three years, there has been a steady increase in the ratio from 2.83 in 2021 to 3.09 in 2022 and further to 3.16 in 2023. This indicates that the company's reliance on debt to finance its operations has been growing over the period under review. A higher financial leverage ratio suggests that a larger portion of the company's assets is funded by debt rather than equity.

A financial leverage ratio of 3.16 as of December 31, 2023, indicates that Sun Country Airlines Holdings Inc has $3.16 in debt for every $1 of equity in the company. While a higher leverage ratio can amplify returns on equity when business is good, it also increases financial risk as the company becomes more vulnerable to economic downturns or fluctuations in interest rates.

Investors and creditors typically monitor changes in financial leverage ratios closely to assess the company's ability to meet its debt obligations and its overall financial health. Sun Country Airlines Holdings Inc's increasing leverage ratio over the years may raise concerns about its ability to manage debt levels effectively and maintain financial stability in the long term.