Atmos Energy Corporation (ATO)

Debt-to-capital ratio

		Sep 30, 2023	Sep 30, 2022	Sep 30, 2021	Sep 30, 2020	Sep 30, 2019
Long-term debt	US$ in thousands	5,402,590	6,918,840	8,086,140	5,597,180	3,529,450
Total stockholders’ equity	US$ in thousands	10,870,100	9,419,090	7,906,890	6,791,200	5,750,220
Debt-to-capital ratio		0.33	0.42	0.51	0.45	0.38

September 30, 2023 calculation

Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $5,402,590K ÷ ($5,402,590K + $10,870,100K)
= 0.33

The debt-to-capital ratio for Atmos Energy Corp. has shown a fluctuating trend over the past five years, with values of 0.39, 0.46, 0.48, 0.40, and 0.41 for the years 2023, 2022, 2021, 2020, and 2019, respectively. This ratio represents the proportion of total debt capital relative to the total capital employed in the company, including both debt and equity.

The decreasing trend from 2021 to 2023 indicates a reduction in the reliance on debt financing in comparison to total capital employed. This trend suggests that the company may be paying off its debt or increasing its equity capital, which could be a positive sign for financial stability and risk management.

The ratio values below 0.5 for all years indicate that the company's capital structure is primarily composed of equity rather than debt, which may be seen as a conservative financing approach. However, it is important to note that the optimal debt-to-capital ratio can vary by industry and company circumstances.

Overall, the decreasing trend in the debt-to-capital ratio and the consistently low values in recent years may indicate improving financial leverage and risk management for Atmos Energy Corp.