The AES Corporation (AES)
Solvency ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 13.01 | 18.01 | 15.74 | 11.78 | 13.14 |
The solvency ratios of The AES Corporation indicate a consistently low level of debt relative to its assets, capital, and equity over the years from 2020 to 2024. The Debt-to-assets ratio, Debt-to-capital ratio, and Debt-to-equity ratio were all reported as 0.00 for each year, demonstrating a strong financial position with minimal reliance on debt to finance its operations.
The Financial leverage ratio, which measures the extent to which the company relies on debt in its capital structure, fluctuated over the years. It decreased from 13.14 in 2020 to 11.78 in 2021, indicating a reduction in the company's reliance on debt. However, the ratio increased significantly to 15.74 in 2022, 18.01 in 2023, and then decreased to 13.01 in 2024. This fluctuation suggests some variability in the company's leverage levels, but overall, the Financial leverage ratio remained within a moderate range.
Overall, the solvency ratios of The AES Corporation reflect a conservative financial structure with low debt levels and a moderate degree of financial leverage, indicating a stable and sustainable financial position.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 2.17 | 1.39 | 0.75 | 0.41 | 1.25 |
The interest coverage ratio measures a company's ability to meet its interest payments on outstanding debt. In the case of The AES Corporation, the trend of the interest coverage ratio from December 31, 2020, to December 31, 2024, is as follows:
- December 31, 2020: The interest coverage ratio was 1.25, indicating that the company's operating income was sufficient to cover its interest expenses 1.25 times over.
- December 31, 2021: The interest coverage ratio decreased to 0.41, signaling a significant decline in the company's ability to cover interest payments with operating income. This may raise concerns about the company's financial health and its ability to service its debt obligations.
- December 31, 2022: The interest coverage ratio improved slightly to 0.75, but it still remains at a relatively low level, indicating continued challenges in meeting interest expenses.
- December 31, 2023: The interest coverage ratio rose to 1.39, showing a positive trend in the company's ability to cover interest payments with operating income compared to the previous year.
- December 31, 2024: The interest coverage ratio further improved to 2.17, suggesting a more comfortable position in servicing interest expenses and potentially reflecting better operational performance or lower interest costs.
Overall, the analysis of The AES Corporation's interest coverage ratio over the period indicates fluctuations in the company's ability to cover interest payments, with some years showing significant challenges while others demonstrate improvement and a stronger financial position. It is important for investors and stakeholders to monitor this ratio closely as it can provide insights into the company's financial sustainability and debt repayment capabilities.