Ziff Davis Inc (ZD)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 3,471,020 | 3,533,270 | 3,770,280 | 3,665,330 | 3,505,850 |
| Total stockholders’ equity | US$ in thousands | 1,893,000 | 1,892,610 | 1,967,730 | 1,211,020 | 1,311,190 |
| Financial leverage ratio | 1.83 | 1.87 | 1.92 | 3.03 | 2.67 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $3,471,020K ÷ $1,893,000K
= 1.83
The financial leverage ratio of Ziff Davis Inc has shown a declining trend over the past five years. The ratio decreased from 2.67 in 2019 to 3.03 in 2020, before further declining to 1.92 in 2021, 1.87 in 2022, and finally reaching 1.83 in 2023.
A financial leverage ratio below 1 indicates that a company relies more on equity financing rather than debt, while a ratio above 1 suggests that the company has more debt than equity in its capital structure.
In the case of Ziff Davis Inc, the decreasing trend in the financial leverage ratio indicates a shift towards more equity financing and a lower reliance on debt to fund its operations and investments. This could potentially signal a more conservative approach to capital structure management, reducing financial risk and increasing financial stability over time. However, it is important to continue monitoring the trend to ensure a healthy balance between debt and equity for sustainable growth and profitability.