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.