SPS Commerce Inc (SPSC)

Financial leverage ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Total assets	US$ in thousands	823,844	672,914	615,846	526,458	447,440
Total stockholders’ equity	US$ in thousands	667,475	537,073	484,259	420,721	354,876
Financial leverage ratio		1.23	1.25	1.27	1.25	1.26

December 31, 2023 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $823,844K ÷ $667,475K
= 1.23

The financial leverage ratio of SPS Commerce Inc. has been relatively consistent over the past five years, ranging from 1.23 to 1.27. This ratio indicates that the company relies on a mix of debt and equity to finance its operations and growth. A ratio above 1 suggests that SPS Commerce has more debt in its capital structure compared to equity.

Although there has been slight fluctuation in the ratio, the overall trend indicates a stable financial leverage position for the company. A lower ratio could imply lower financial risk due to less reliance on debt financing, while a higher ratio could suggest potential for higher returns but also higher financial risk. It is important for SPS Commerce to monitor and manage its financial leverage effectively to ensure it maintains a healthy balance between debt and equity in its capital structure.