Atmos Energy Corporation (ATO)

The solvency ratios of Atmos Energy Corporation indicate its ability to meet its long-term financial obligations and manage its debt levels. The debt-to-assets ratio has shown a fluctuating trend over the years, with the ratio decreasing from 0.41 in 2021 to 0.29 in 2024, reflecting a better ability to cover its liabilities with assets.

Similarly, the debt-to-capital ratio has also exhibited a declining pattern over the years, reducing from 0.51 in 2021 to 0.38 in 2024. This suggests that the company has been successful in reducing its reliance on debt to finance its operations and investments.

The debt-to-equity ratio, on the other hand, has shown significant fluctuations, ranging from 0.50 in 2023 to 1.02 in 2021. Although the ratio decreased to 0.60 in 2024, it still indicates a relatively high level of debt compared to equity in the capital structure.

Lastly, the financial leverage ratio has remained relatively stable around 2.0 over the years, indicating that Atmos Energy Corporation has a moderate level of financial leverage in its capital structure.

Overall, the analysis of solvency ratios suggests that Atmos Energy Corporation has been managing its debt levels effectively, with improvements in its debt coverage ratios over the years. However, the company should continue to monitor and optimize its capital structure to ensure long-term financial stability and growth.

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Coverage ratios

Atmos Energy Corporation's interest coverage has shown a significant improvement over the past five years. The interest coverage ratio measures the company's ability to meet its interest obligations with its operating income.

In 2024, the interest coverage ratio stands at a robust 92.48, indicating that the company's operating income is able to cover its interest expenses almost 93 times over. This suggests a strong financial position and a healthy ability to service debt.

Compared to the previous year, where the interest coverage was 8.28, the significant increase in 2024 is a positive sign of improved financial health and profitability. The company has not only managed to dramatically increase its interest coverage but has also surpassed the levels seen in the prior years, which were already above the industry average.

Overall, the trend of increasing interest coverage ratios over the five-year period reflects positively on Atmos Energy Corporation's ability to generate sufficient operating income to cover its interest expenses while indicating improved financial stability and creditworthiness.