Allete Inc (ALE)

Financial leverage 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
Total assets	US$ in thousands	6,656,400	6,644,800	6,567,900	6,704,500	6,845,600	6,858,000	6,839,000	6,556,000	6,422,300	6,332,200	6,293,300	6,274,500	6,084,600	5,878,500	5,760,400	5,619,500	5,482,800	5,275,800	5,176,500	5,218,800
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
Financial leverage ratio		2.37	2.38	2.40	2.47	2.54	2.56	2.55	2.68	2.67	2.71	2.71	2.70	2.65	2.58	2.54	2.47	2.46	2.39	2.35	2.37

December 31, 2023 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $6,656,400K ÷ $2,809,600K
= 2.37

The financial leverage ratio for Allete, Inc. has exhibited a general decreasing trend from Q1 2022 to Q4 2023, declining from 2.68 to 2.37. This indicates a reduction in the company's reliance on debt financing over this period. It is worth noting that the ratio fluctuated within a relatively narrow range, with the highest ratio recorded in Q1 2022 at 2.68 and the lowest in Q4 2023 at 2.37.

A financial leverage ratio above 1 implies that the company has more debt than equity in its capital structure. Allete, Inc. has consistently maintained a financial leverage ratio above 1 throughout the periods analyzed, indicating that the company is leveraging its operations with debt. However, the decreasing trend suggests a potential improvement in the company's financial risk profile, as lower leverage ratios typically indicate lower financial risk and greater financial stability.

Overall, the decreasing trend in Allete, Inc.'s financial leverage ratio over the quarters indicates a strategic shift towards a more sustainable and balanced capital structure with reduced dependence on debt financing.