Ameren Corp (AEE)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 40,830,000 | 37,904,000 | 35,735,000 | 32,030,000 | 28,933,000 |
| Total stockholders’ equity | US$ in thousands | 11,349,000 | 10,508,000 | 9,700,000 | 8,938,000 | 8,059,000 |
| Financial leverage ratio | 3.60 | 3.61 | 3.68 | 3.58 | 3.59 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $40,830,000K ÷ $11,349,000K
= 3.60
The financial leverage ratio of Ameren Corp. has remained relatively stable over the past five years, ranging from 3.58 to 3.68. This ratio indicates that, on average, the company has been using approximately 3.60 times more debt in relation to equity to finance its operations and growth.
A financial leverage ratio of 3.60 implies that Ameren Corp. relies moderately on debt financing to support its assets and operations. It suggests that a significant portion of the company's capital structure is comprised of debt, which can potentially amplify returns to shareholders during periods of growth, but also increases financial risk, particularly in times of economic downturns or increasing interest rates.
Overall, Ameren Corp.'s consistent financial leverage ratio reflects a balanced approach to capital structure management, where the company is able to leverage debt effectively without significantly compromising its financial stability. However, continuous monitoring of this ratio is essential to ensure that the level of debt remains sustainable and in line with the company's overall financial strategy.
Peer comparison
Dec 31, 2023