SPS Commerce Inc (SPSC)
Financial leverage ratio
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 1,031,230 | 823,844 | 672,914 | 615,846 | 526,458 |
| Total stockholders’ equity | US$ in thousands | 854,690 | 667,475 | 537,073 | 484,259 | 420,721 |
| Financial leverage ratio | 1.21 | 1.23 | 1.25 | 1.27 | 1.25 |
December 31, 2024 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $1,031,230K ÷ $854,690K
= 1.21
The financial leverage ratio of SPS Commerce Inc has shown a slight fluctuation over the years, from 1.25 in December 2020 to 1.21 in December 2024. This ratio indicates the company's reliance on debt financing to support its operations and growth.
A financial leverage ratio above 1 suggests that the company has more debt than equity in its capital structure. SPS Commerce's ratios above 1 indicate that a larger portion of the company's assets is financed through debt rather than equity.
The decreasing trend in the financial leverage ratio from 2020 to 2024 suggests that SPS Commerce has been gradually reducing its reliance on debt financing and moving towards a more balanced capital structure. This might indicate a more conservative approach to financing operations, which could enhance the company's financial stability and reduce potential risks associated with high debt levels.
Overall, monitoring the financial leverage ratio is crucial for assessing SPS Commerce's ability to meet its debt obligations and for evaluating its risk profile and financial health over time.
Peer comparison
Dec 31, 2024