Verra Mobility Corp (VRRM)

Financial leverage ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Total assets	US$ in thousands	1,789,980	1,756,270	1,837,060	1,367,320	1,407,430
Total stockholders’ equity	US$ in thousands	421,467	231,070	259,964	315,572	309,614
Financial leverage ratio		4.25	7.60	7.07	4.33	4.55

December 31, 2023 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $1,789,980K ÷ $421,467K
= 4.25

The financial leverage ratio measures the extent to which a company relies on debt financing rather than equity. A higher financial leverage ratio indicates a higher level of debt in relation to equity, which can increase the company's financial risk but also potentially amplify returns.

In the case of Verra Mobility Corp, the financial leverage ratio has fluctuated over the past five years. In 2023, the ratio stands at 4.25, representing a decrease from the previous year. This suggests that the company has reduced its reliance on debt financing compared to 2022 when the ratio was 7.60.

Looking further back, in 2021 and 2020, the financial leverage ratio was relatively high at 7.07 and 4.33 respectively, indicating a significant amount of debt in the company's capital structure. However, in 2019, the ratio was slightly lower at 4.15.

Overall, Verra Mobility Corp has shown varying levels of financial leverage over the years, with a notable decrease in 2023 compared to the previous year. This may indicate a shift in the company's financing strategy towards a more balanced mix of debt and equity, potentially reducing its financial risk.