Zimmer Biomet Holdings Inc (ZBH)

Financial leverage ratio

		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	Jun 30, 2019	Mar 31, 2019
Total assets	US$ in thousands	21,496,900	21,217,300	21,294,300	21,243,500	21,066,000	21,333,300	21,452,700	21,617,500	23,456,400	24,008,600	24,223,200	24,026,600	24,417,700	24,025,500	23,647,600	25,512,900	24,638,700	24,315,200	24,205,700	24,289,000
Total stockholders’ equity	US$ in thousands	12,480,500	12,510,800	12,371,500	12,150,700	12,020,300	12,244,700	12,118,400	12,015,500	12,660,700	12,708,600	12,577,900	12,445,000	12,194,200	11,872,200	11,641,400	11,878,600	12,388,100	12,081,500	11,659,100	11,534,400
Financial leverage ratio		1.72	1.70	1.72	1.75	1.75	1.74	1.77	1.80	1.85	1.89	1.93	1.93	2.00	2.02	2.03	2.15	1.99	2.01	2.08	2.11

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 been relatively stable over the past 8 quarters, ranging from 1.70 to 1.80. The ratio indicates that the company's capital structure is primarily funded by debt, with an average leverage ratio of approximately 1.74. This suggests that Zimmer Biomet relies more on debt financing rather than equity financing to support its operations and growth initiatives.

A financial leverage ratio of 1.74 implies that for every $1 of equity, Zimmer Biomet has approximately $1.74 of debt. While this level of leverage can amplify returns for shareholders in favorable market conditions, it also increases financial risk in times of economic downturns or adverse business conditions. It is essential for investors and stakeholders to closely monitor the company's leverage ratio and overall debt levels to assess its financial stability and risk profile.

Overall, Zimmer Biomet's consistent financial leverage ratio indicates a strategic use of debt to drive growth and expansion, but also highlights the importance of maintaining a healthy balance between debt and equity to ensure long-term financial sustainability.