Atmos Energy Corporation (ATO)

Debt-to-capital ratio

		Sep 30, 2024	Sep 30, 2023	Sep 30, 2022	Sep 30, 2021	Sep 30, 2020
Long-term debt	US$ in thousands	7,337,940	5,402,590	6,918,840	8,086,140	5,597,180
Total stockholders’ equity	US$ in thousands	12,157,700	10,870,100	9,419,090	7,906,890	6,791,200
Debt-to-capital ratio		0.38	0.33	0.42	0.51	0.45

September 30, 2024 calculation

Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $7,337,940K ÷ ($7,337,940K + $12,157,700K)
= 0.38

The debt-to-capital ratio of Atmos Energy Corporation has fluctuated over the past five years. In the most recent period ending on September 30, 2024, the ratio stands at 0.38, indicating that 38% of the company's capital structure is funded by debt. This represents an increase from the previous year's ratio of 0.33.

Looking at the trend over the period, we observe that the debt-to-capital ratio was highest in 2021 at 0.51 and lowest in 2023 at 0.33. This suggests that the company has made efforts to reduce its reliance on debt financing between 2021 and 2023, but this trend reversed in 2024 with the ratio increasing to 0.38.

A lower debt-to-capital ratio generally indicates a lower financial risk and greater financial flexibility for the company, as it implies less reliance on debt to fund its operations and expansion. Conversely, a higher ratio may signal higher financial risk and potential difficulties in servicing debt obligations.

In conclusion, the debt-to-capital ratio for Atmos Energy Corporation has shown variability in recent years, with the most recent ratio of 0.38 indicating a moderate level of debt in the company's capital structure. Investors and stakeholders should continue to monitor this ratio along with other financial metrics to assess the company's overall financial health and risk profile.