TransMedics Group Inc (TMDX)

Financial leverage ratio

		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	Dec 31, 2019
Total assets	US$ in thousands	785,571	758,577	723,831	706,047	689,227	690,358	287,088	277,147	274,873	117,285	124,008	134,893	131,146	140,512	145,783	152,026	159,322	163,137	96,923	105,299
Total stockholders’ equity	US$ in thousands	209,920	189,894	159,471	137,202	126,460	145,213	192,625	187,375	187,857	50,919	59,910	67,854	78,549	88,983	97,675	103,891	109,550	113,760	46,683	54,649
Financial leverage ratio		3.74	3.99	4.54	5.15	5.45	4.75	1.49	1.48	1.46	2.30	2.07	1.99	1.67	1.58	1.49	1.46	1.45	1.43	2.08	1.93

September 30, 2024 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $785,571K ÷ $209,920K
= 3.74

The financial leverage ratio of TransMedics Group Inc has shown significant fluctuation over the past several quarters. The ratio, which measures the extent to which the company relies on debt to fund its operations, ranged from a low of 1.43 in December 2019 to a high of 5.45 in September 2023.

A higher financial leverage ratio indicates that the company is relying more on debt financing, which can magnify returns but also increases financial risk. Conversely, a lower ratio suggests a more conservative capital structure with a higher proportion of equity financing.

It is evident that TransMedics Group Inc experienced a sudden increase in financial leverage in early 2024, reaching a peak of 4.54 in March before further climbing to 5.15 in December. This upward trend in leverage may indicate a strategic shift towards debt financing, possibly for expansion or investment purposes.

In contrast, the company's leverage ratio sharply declined in the most recent quarter to 3.74, which could signify a reduction in debt levels relative to assets. This decrease may have been driven by debt repayment, improved profitability, or a shift towards equity financing.

Overall, the financial leverage ratio of TransMedics Group Inc has exhibited volatility and varied significantly over the past few quarters, suggesting changes in the company's capital structure and financial strategy. Investors and stakeholders should closely monitor these trends to assess the company's risk profile and financial stability.