TripAdvisor Inc (TRIP)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 2,537,000 | 2,569,000 | 2,289,000 | 1,969,000 | 1,984,000 |
| Total stockholders’ equity | US$ in thousands | 871,000 | 861,000 | 789,000 | 886,000 | 1,161,000 |
| Financial leverage ratio | 2.91 | 2.98 | 2.90 | 2.22 | 1.71 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $2,537,000K ÷ $871,000K
= 2.91
The financial leverage ratio of TripAdvisor Inc. has exhibited fluctuations over the past five years. The ratio has been on an upward trend from 2019 to 2022, peaking at 2.98 in 2022, indicating an increasing level of financial leverage during this period. However, in 2023, the ratio decreased slightly to 2.91.
A financial leverage ratio above 2 suggests that the company relies more on debt financing than equity financing to fund its operations and growth. A higher ratio indicates a higher degree of financial risk, as the company has more debt in its capital structure.
The significant increase in the financial leverage ratio from 2019 to 2022 may imply that TripAdvisor Inc. took on more debt to support its operations or expansion activities during those years. The decrease in the ratio in 2023 could indicate a potential reduction in debt levels or a relative increase in equity.
Overall, the trend of the financial leverage ratio for TripAdvisor Inc. shows varying levels of leverage over the past five years, with the company potentially adjusting its capital structure to manage its financial risk and optimize its capital mix.
Peer comparison
Dec 31, 2023