Zimmer Biomet Holdings Inc (ZBH)

Financial leverage ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Total assets	US$ in thousands	21,496,900	21,066,000	23,456,400	24,417,700	24,638,700
Total stockholders’ equity	US$ in thousands	12,480,500	12,020,300	12,660,700	12,194,200	12,388,100
Financial leverage ratio		1.72	1.75	1.85	2.00	1.99

December 31, 2023 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $21,496,900K ÷ $12,480,500K
= 1.72

The financial leverage ratio of Zimmer Biomet Holdings Inc has shown a declining trend over the five-year period from 2019 to 2023. The ratio decreased from 1.99 in 2019 to 1.72 in 2023.

A financial leverage ratio of 1.72 in 2023 indicates that the company's assets are financed through a higher proportion of equity rather than debt. This suggests that Zimmer Biomet Holdings Inc has a lower financial risk due to a lower reliance on debt in its capital structure.

The decreasing trend in the financial leverage ratio reflects a potentially more conservative financial strategy by the company, as it has reduced its reliance on debt financing over the years. This can lead to a more stable financial position and lower interest rate risk for the company.

Overall, the declining trend in Zimmer Biomet Holdings Inc's financial leverage ratio indicates a favorable shift towards a more balanced and sustainable capital structure, which may enhance the company's long-term financial stability and risk management.