Shutterstock (SSTK)
Financial leverage ratio
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 1,309,160 | 1,036,020 | 881,184 | 851,710 | 729,644 |
| Total stockholders’ equity | US$ in thousands | 518,350 | 527,094 | 447,482 | 468,482 | 421,925 |
| Financial leverage ratio | 2.53 | 1.97 | 1.97 | 1.82 | 1.73 |
December 31, 2024 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $1,309,160K ÷ $518,350K
= 2.53
The financial leverage ratio of Shutterstock has been gradually increasing over the years, indicating a growing level of financial leverage. The ratio was 1.73 as of December 31, 2020, and has risen to 2.53 by December 31, 2024. This suggests that the company has been relying more on debt to finance its operations and investments.
A financial leverage ratio above 1 indicates that the company has more debt than equity in its capital structure. While leverage can amplify returns during good times, it also increases financial risk, as the company must meet interest payments and repay principal amounts even when facing financial challenges.
The increase in the financial leverage ratio over the years may be a strategic decision by Shutterstock to take advantage of low-interest rates or to fund expansion opportunities. However, investors and creditors should closely monitor the company's ability to manage its debt levels and service its obligations, especially during economic downturns or in times of financial stress.
Peer comparison
Dec 31, 2024