Vertex Pharmaceuticals Inc (VRTX)

Financial leverage ratio

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Total assets	US$ in thousands	22,533,200	22,730,200	18,150,900	13,432,500	11,751,800
Total stockholders’ equity	US$ in thousands	16,409,600	17,580,400	13,912,700	10,100,000	8,686,800
Financial leverage ratio		1.37	1.29	1.30	1.33	1.35

December 31, 2024 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $22,533,200K ÷ $16,409,600K
= 1.37

Based on the data provided, Vertex Pharmaceuticals Inc's financial leverage ratio has shown a slight fluctuation over the years. The ratio decreased from 1.35 in December 31, 2020, to 1.33 in December 31, 2021. It continued to decline to 1.30 in December 31, 2022, and further to 1.29 in December 31, 2023. However, there was a slight increase to 1.37 by December 31, 2024.

The financial leverage ratio measures the extent to which a company relies on debt financing versus equity to fund its operations and growth. A ratio above 1 indicates that the company has more debt than equity in its capital structure, while a ratio below 1 suggests a stronger reliance on equity financing.

The decreasing trend in Vertex Pharmaceuticals Inc's financial leverage ratio indicates a gradual reduction in the company's reliance on debt for financing its operations over the years. However, the increase in the ratio in 2024 may suggest a potential shift towards more debt financing in that year.

Overall, the company's financial leverage ratio demonstrates a balanced approach to capital structure management, with a historical preference for equity financing, although there seems to be some variability in the financing mix in recent years.