Workday Inc (WDAY)

Financial leverage ratio

		Jan 31, 2025	Oct 31, 2024	Jul 31, 2024	Apr 30, 2024	Jan 31, 2024	Oct 31, 2023	Jul 31, 2023	Apr 30, 2023	Jan 31, 2023	Oct 31, 2022	Jul 31, 2022	Apr 30, 2022	Jan 31, 2022	Oct 31, 2021	Jul 31, 2021	Apr 30, 2021	Jan 31, 2021	Oct 31, 2020	Jul 31, 2020	Apr 30, 2020
Total assets	US$ in thousands	17,977,000	16,424,000	16,234,000	15,941,000	16,452,000	13,925,900	13,735,300	13,252,800	13,486,000	12,389,800	13,249,600	12,799,100	10,498,500	9,440,880	9,113,840	8,624,010	8,718,410	7,845,030	7,501,450	7,227,500
Total stockholders’ equity	US$ in thousands	9,034,000	8,624,000	8,345,000	8,163,000	8,082,000	6,625,000	6,274,000	5,942,000	5,585,000	5,409,110	5,127,810	4,780,810	4,535,080	4,215,820	3,867,990	3,405,440	3,277,830	3,078,050	2,838,480	2,602,000
Financial leverage ratio		1.99	1.90	1.95	1.95	2.04	2.10	2.19	2.23	2.41	2.29	2.58	2.68	2.31	2.24	2.36	2.53	2.66	2.55	2.64	2.78

January 31, 2025 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $17,977,000K ÷ $9,034,000K
= 1.99

The financial leverage ratio of Workday Inc has displayed a declining trend from 2.78 in April 2020 to 1.99 in January 2025. This ratio measures the extent to which the company relies on debt financing versus equity financing. A higher financial leverage ratio indicates a higher level of debt relative to equity, suggesting higher financial risk. Conversely, a lower ratio implies a lower level of debt compared to equity, indicating a lower financial risk and greater financial stability.

The decreasing trend in Workday Inc's financial leverage ratio suggests that the company has been gradually reducing its reliance on debt financing over time relative to equity financing. This is a positive trend as it indicates a decreasing level of financial risk and a more balanced capital structure. It also indicates that the company may be managing its debt levels effectively and maintaining a healthy financial position.

However, it is important to note that a low financial leverage ratio does not necessarily imply that the company is in a better position, as a balanced mix of debt and equity financing depends on various factors such as the industry dynamics, growth opportunities, and the company's risk appetite. Therefore, while a declining financial leverage ratio can be seen as a positive indicator of financial health, it should be considered in conjunction with other financial metrics and factors affecting the company's operations and industry.