Vertex Pharmaceuticals Inc (VRTX)

Financial leverage ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Total assets	US$ in thousands	22,730,200	18,150,900	13,432,500	11,751,800	8,318,460
Total stockholders’ equity	US$ in thousands	17,580,400	13,912,700	10,100,000	8,686,800	6,085,200
Financial leverage ratio		1.29	1.30	1.33	1.35	1.37

December 31, 2023 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $22,730,200K ÷ $17,580,400K
= 1.29

The financial leverage ratio measures the extent to which a company is using debt to finance its operations and assets. Vertex Pharmaceuticals, Inc. has shown a decreasing trend in its financial leverage ratio over the past five years, declining from 1.37 in 2019 to 1.29 in 2023. This indicates that the company has been reducing its reliance on debt to fund its operations and investments.

A lower financial leverage ratio suggests that Vertex Pharmaceuticals has a lower level of debt relative to its equity, which may indicate a stronger financial position and lower financial risk. It also implies that the company may have more financial flexibility and stability, as it is less vulnerable to changes in interest rates or difficulties in servicing debt obligations.

Overall, the decreasing trend in the financial leverage ratio of Vertex Pharmaceuticals, Inc. indicates a positive development in the company's capital structure and financial health, reflecting a prudent approach to managing its debt levels over the years.