SPS Commerce Inc (SPSC)

Financial leverage ratio

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020
Total assets	US$ in thousands	1,031,230	1,003,300	854,521	839,847	823,844	787,408	735,538	696,927	672,914	637,090	622,776	613,308	615,846	591,283	572,278	549,837	526,458	487,686	461,663	439,819
Total stockholders’ equity	US$ in thousands	854,690	829,365	703,421	682,965	667,475	626,844	600,981	565,889	537,073	507,663	497,020	491,521	484,259	470,528	454,749	440,523	420,721	394,940	373,310	355,188
Financial leverage ratio		1.21	1.21	1.21	1.23	1.23	1.26	1.22	1.23	1.25	1.25	1.25	1.25	1.27	1.26	1.26	1.25	1.25	1.23	1.24	1.24

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 relatively stable levels ranging between 1.21 and 1.27 over the period from March 31, 2020, to December 31, 2024. This ratio indicates that the company has maintained a moderate level of financial leverage, with the ratio hovering around 1.24 on average.

A financial leverage ratio of 1.24, for example, implies that for every dollar of equity in the business, there is $1.24 of debt financing. This suggests that SPS Commerce Inc relies more on equity financing than debt to support its operations and growth objectives.

Overall, the consistent range of the financial leverage ratio demonstrates a prudent approach to managing the company's capital structure, balancing the use of debt and equity to optimize financial performance and maintain stability. It is essential for stakeholders to monitor this ratio to ensure that the company's leverage remains within manageable and sustainable levels.