Viavi Solutions Inc (VIAV)

Financial leverage ratio

		Jun 30, 2024	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020
Total assets	US$ in thousands	1,736,300	1,850,500	1,827,900	1,961,400	1,776,300
Total stockholders’ equity	US$ in thousands	681,600	690,800	671,700	763,900	633,200
Financial leverage ratio		2.55	2.68	2.72	2.57	2.81

June 30, 2024 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $1,736,300K ÷ $681,600K
= 2.55

The financial leverage ratio of Viavi Solutions Inc has shown some fluctuations over the past five years. The ratio decreased from 2.81 in 2020 to 2.55 in 2024, with a peak of 2.72 in 2022. This indicates that the company's reliance on debt to finance its operations has varied over the years.

A financial leverage ratio above 1 suggests that the company is using more debt to finance its assets than equity. Viavi Solutions Inc's ratios over the years ranging from 2.55 to 2.81 indicate a moderate to high level of financial leverage, signifying that a significant portion of the company's assets is funded by debt.

It is important to note that a high financial leverage ratio can increase the company's financial risk, as it implies a higher debt burden that needs to be serviced through interest payments. Investors and creditors should closely monitor the trend in the financial leverage ratio to assess Viavi Solutions Inc's ability to manage its debt obligations effectively and sustain long-term financial stability.