SolarWinds Corp (SWI)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 3,250,920 | 3,200,010 | 4,792,130 | 5,710,480 | 5,310,740 |
| Total stockholders’ equity | US$ in thousands | 1,442,040 | 1,369,650 | 2,287,900 | 3,010,690 | 2,649,520 |
| Financial leverage ratio | 2.25 | 2.34 | 2.09 | 1.90 | 2.00 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $3,250,920K ÷ $1,442,040K
= 2.25
The financial leverage ratio for SolarWinds Corp has fluctuated over the past five years. The ratio indicates the level of debt financing used by the company relative to its equity. In 2023, the financial leverage ratio stood at 2.25, showing an increase from the previous year's ratio of 2.34. This suggests a higher dependence on debt to finance the company's operations in 2023 compared to 2022.
Looking further back, the ratio has shown variations. In 2021, the ratio was 2.09, reflecting a moderate level of leverage compared to 2020 when it was 1.90. The highest ratio was observed in 2019 at 2.00. These fluctuations indicate changes in the company's capital structure and its approach to financing its operations over the years.
Overall, the trend in the financial leverage ratio indicates that SolarWinds Corp has been gradually increasing its reliance on debt financing relative to equity. This may be a strategic decision to take advantage of debt at low interest rates or to fuel growth initiatives. However, higher leverage also entails higher financial risk due to increased interest payments and potential constraints on future borrowing capacity.
Peer comparison
Dec 31, 2023