Name: Financial Leverage

Definition: Financial leverage tells you how much borrowed money the company uses to boost its size and profits. Using leverage can help a business grow faster, but it also increases pressure if sales slow down. Moderate leverage is common and often healthy. Excessive leverage can be dangerous, especially during tough economic times.

Interpretation:
• In '2021', FDS's financial leverage was 2.19, indicating how much debt is used to finance assets. Industry average for Computer Software: Programming Data Processing in '2021' stood at 1.50.
• In '2022', FDS's financial leverage was 2.66, indicating how much debt is used to finance assets. The increase compared to '2021' may signal growing financial pressure. Industry average for Computer Software: Programming Data Processing in '2022' stood at 1.97. Industry average increased by 0.47 compared to previous year.
• In '2023', FDS's financial leverage was 2.70, indicating how much debt is used to finance assets. The increase compared to '2022' may signal growing financial pressure. Industry average for Computer Software: Programming Data Processing in '2023' stood at 1.80. Industry average declined by 0.17 from previous year.
• In '2024', FDS's financial leverage was 2.27, indicating how much debt is used to finance assets. The decrease since '2023' reflects improving financial health. Industry average for Computer Software: Programming Data Processing in '2024' stood at 1.45. Industry average declined by 0.36 from previous year.
Overall, FDS's financial leverage has steadily improved over the past 4 years.

Formula: Financial Leverage = Average Total Assets / Average Shareholders' Equity

Good Range: 1 to 3 common; above 3 may indicate high leverage risk.