T-Mobile US Inc (TMUS)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 207,682,000 | 211,338,000 | 206,563,000 | 200,162,000 | 86,921,000 |
| Total stockholders’ equity | US$ in thousands | 64,715,000 | 69,656,000 | 69,102,000 | 65,344,000 | 28,789,000 |
| Financial leverage ratio | 3.21 | 3.03 | 2.99 | 3.06 | 3.02 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $207,682,000K ÷ $64,715,000K
= 3.21
The financial leverage ratio of T-Mobile US Inc has shown a fluctuating trend over the past five years. The ratio increased from 3.02 in 2019 to 3.06 in 2020, before decreasing to 2.99 in 2021. However, it rose again to 3.03 in 2022 and reached its highest point at 3.21 in 2023.
A financial leverage ratio above 1 indicates that the company has more debt than equity in its capital structure. T-Mobile's increasing financial leverage ratio over the years suggests a growing reliance on debt to finance its operations and investments. This may be a strategic move to take advantage of low-interest rates or to fund expansion initiatives.
However, a high financial leverage ratio also indicates a higher level of financial risk, as the company has higher debt obligations to meet. It is essential for T-Mobile to carefully manage its debt levels to ensure financial stability and avoid potential liquidity challenges or credit rating downgrades in the future.