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', SPT's financial leverage was 1.82, indicating how much debt is used to finance assets. Industry average for Computer Software: Prepackaged Software in '2021' stood at 1.68.
• In '2022', SPT's financial leverage was 1.94, indicating how much debt is used to finance assets. The increase compared to '2021' may signal growing financial pressure. Industry average for Computer Software: Prepackaged Software in '2022' stood at 1.97. Industry average increased by 0.29 compared to previous year.
• In '2023', SPT's financial leverage was 2.41, indicating how much debt is used to finance assets. The increase compared to '2022' may signal growing financial pressure. Industry average for Computer Software: Prepackaged Software in '2023' stood at 1.86. Industry average declined by 0.11 from previous year.
• In '2024', SPT's financial leverage was 2.65, indicating how much debt is used to finance assets. The increase compared to '2023' may signal growing financial pressure. Industry average for Computer Software: Prepackaged Software in '2024' stood at 1.82. Industry average declined by 0.04 from previous year.
Overall, SPT's financial leverage has been volatile but showed an upward trend 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.