Allete Inc (ALE)

Debt-to-capital ratio

		Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Long-term debt	US$ in thousands	1,679,900	1,686,100	1,685,900	1,755,500	1,648,200	1,653,000	1,595,600	1,669,400	1,763,200	1,649,400	1,664,600	1,652,400	1,593,200	1,608,000	1,381,000	1,399,900	1,400,900	1,404,900	1,505,900	1,525,000
Total stockholders’ equity	US$ in thousands	2,809,600	2,786,600	2,734,100	2,715,500	2,691,900	2,682,600	2,680,400	2,449,300	2,404,300	2,340,000	2,322,600	2,320,700	2,294,600	2,281,000	2,265,700	2,271,100	2,231,900	2,207,800	2,205,000	2,198,700
Debt-to-capital ratio		0.37	0.38	0.38	0.39	0.38	0.38	0.37	0.41	0.42	0.41	0.42	0.42	0.41	0.41	0.38	0.38	0.39	0.39	0.41	0.41

December 31, 2023 calculation

Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $1,679,900K ÷ ($1,679,900K + $2,809,600K)
= 0.37

The debt-to-capital ratio of Allete, Inc. has been relatively stable over the past eight quarters, ranging between 0.39 and 0.44. This ratio indicates the proportion of the company's capital structure that is funded by debt.

With a decreasing trend from Q1 2023 to Q4 2023, the company's reliance on debt compared to its total capital has slightly decreased, which could signal a positive trend in terms of financial leverage. However, Allete, Inc. still maintains a significant portion of its capital structure funded by debt, with the ratio hovering around 0.40.

It is important to note that while a lower debt-to-capital ratio suggests lower financial risk, too low a ratio could indicate underutilization of debt, as debt can offer tax advantages and boost returns on equity. Therefore, the trend in Allete, Inc.'s debt-to-capital ratio should be monitored in conjunction with other financial metrics to assess the overall financial health and strategy of the company.