Wolfspeed Inc (WOLF)

Financial leverage ratio

		Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019
Total assets	US$ in thousands	7,984,600	7,696,200	7,290,200	7,312,800	6,586,700	5,454,700	5,342,900	3,858,500	3,917,500	3,752,700	3,216,900	3,248,800	3,446,800	3,507,700	3,124,900	3,123,300	3,231,000	2,737,900	2,782,800	2,796,600
Total stockholders’ equity	US$ in thousands	882,100	1,022,600	1,150,200	1,245,700	1,621,900	1,706,800	1,780,200	2,109,600	2,439,300	2,390,400	2,378,900	2,039,400	2,116,500	2,247,000	1,864,900	1,908,700	2,083,100	1,939,500	1,991,200	2,020,600
Financial leverage ratio		9.05	7.53	6.34	5.87	4.06	3.20	3.00	1.83	1.61	1.57	1.35	1.59	1.63	1.56	1.68	1.64	1.55	1.41	1.40	1.38

June 30, 2024 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $7,984,600K ÷ $882,100K
= 9.05

The financial leverage ratio of Wolfspeed Inc has exhibited a significant increase over the past few quarters, indicating a higher level of financial leverage or debt utilization in the company's capital structure. From a value of 1.38 in December 2019, the ratio has steadily increased, reaching 9.05 by June 2024.

This rise in the financial leverage ratio reflects a substantial growth in the company's reliance on debt financing to support its operations or growth initiatives. While debt can be a cost-effective source of capital, particularly in low-interest rate environments, it also entails increased financial risk due to interest payments and potential constraints on cash flows.

Investors and analysts should closely monitor Wolfspeed Inc's financial leverage ratio to assess the company's ability to manage its debt levels effectively and maintain a healthy balance between debt and equity in its capital structure. High levels of financial leverage may amplify the company's financial risks during economic downturns or periods of rising interest rates.