Tandem Diabetes Care Inc (TNDM)

Financial leverage ratio

		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	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Total assets	US$ in thousands	952,658	939,909	946,676	954,145	1,052,780	1,047,520	1,036,580	1,015,280	905,137	850,279	795,250	754,273	716,415	672,988	616,239	343,327	326,110	292,647	255,081	214,698
Total stockholders’ equity	US$ in thousands	313,632	314,000	329,234	338,753	439,947	421,822	449,584	437,382	433,112	389,654	346,085	313,414	366,305	326,544	267,704	207,176	194,979	166,994	145,345	120,962
Financial leverage ratio		3.04	2.99	2.88	2.82	2.39	2.48	2.31	2.32	2.09	2.18	2.30	2.41	1.96	2.06	2.30	1.66	1.67	1.75	1.76	1.77

December 31, 2023 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $952,658K ÷ $313,632K
= 3.04

The financial leverage ratio of Tandem Diabetes Care Inc has been gradually increasing over the past eight quarters, indicating an increasing level of financial leverage.

The ratio has shown a steady upward trend from 2.31 in Q2 2022 to 3.04 in Q4 2023. This suggests that the company is relying more on debt financing as compared to equity financing to support its operations and growth initiatives.

A financial leverage ratio above 1 indicates that the company is using more debt than equity to finance its operations. In this case, with a financial leverage ratio consistently above 2, Tandem Diabetes Care Inc is considered to have a relatively high level of financial leverage.

While high financial leverage can potentially magnify returns for shareholders during favorable economic conditions, it also increases the financial risk for the company, especially during economic downturns when debt obligations become more challenging to manage.

It is essential for Tandem Diabetes Care Inc to carefully manage its financial leverage ratio and ensure that it maintains a healthy balance between debt and equity financing to support sustainable long-term growth and financial stability.