Ameren Corp (AEE)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.37 | 0.36 | 0.35 | 0.35 | 0.31 |
| Debt-to-capital ratio | 0.57 | 0.57 | 0.56 | 0.55 | 0.53 |
| Debt-to-equity ratio | 1.33 | 1.30 | 1.30 | 1.24 | 1.11 |
| Financial leverage ratio | 3.60 | 3.61 | 3.68 | 3.58 | 3.59 |
The solvency ratios of Ameren Corp. indicate the company's ability to meet its long-term financial obligations. The debt-to-assets ratio has shown a slight increasing trend over the past five years, from 0.34 in 2019 to 0.40 in 2023, which suggests that Ameren's reliance on debt to finance its assets has also increased during this period.
Similarly, the debt-to-capital ratio has also slightly increased from 0.55 in 2019 to 0.59 in 2023, indicating that a larger portion of Ameren's capital structure is made up of debt rather than equity.
The debt-to-equity ratio has shown a consistent upward trend, from 1.22 in 2019 to 1.45 in 2023, indicating that the company's leverage has been increasing over the years, which could pose a higher risk to equity holders.
The financial leverage ratio, which measures the company's total assets relative to shareholders' equity, has fluctuated over the years but has remained relatively stable, ranging from 3.58 in 2020 to 3.61 in 2022.
Overall, Ameren Corp.'s solvency ratios suggest that the company has been increasingly relying on debt to finance its operations and investments, which may raise concerns about its overall financial risk and ability to service its debt obligations in the future.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 2.75 | 3.12 | 3.48 | 3.10 | 3.33 |
Ameren Corp.'s interest coverage ratio has exhibited some fluctuations over the past five years. The ratio decreased from 3.64 in 2019 to 3.33 in 2020 but then increased to 3.74 in 2021. However, in the following years, there was a decline in the interest coverage ratio to 3.36 in 2022 and further to 2.75 in 2023.
The interest coverage ratio measures a company's ability to pay interest expenses on outstanding debt. A higher ratio indicates that the company is more capable of meeting its interest obligations from its operating income. In the case of Ameren Corp., while the ratio decreased in the most recent year, it remains above 1, suggesting the company's earnings are still sufficient to cover its interest expenses.
Overall, although there has been variability in Ameren Corp.'s interest coverage ratio in recent years, the company has generally maintained a healthy level of coverage, indicating a reasonable ability to service its debt obligations. It is important for investors and creditors to continue monitoring this ratio to assess the company's financial health and debt repayment capacity.