Avista Corporation (AVA)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.14 | 0.31 | 0.28 | 0.31 | 0.30 |
| Debt-to-capital ratio | 0.31 | 0.49 | 0.47 | 0.50 | 0.49 |
| Debt-to-equity ratio | 0.44 | 0.98 | 0.88 | 0.99 | 0.95 |
| Financial leverage ratio | 3.10 | 3.18 | 3.18 | 3.15 | 3.14 |
The solvency ratios of Avista Corp. provide insights into the company's ability to meet its long-term financial obligations. The trends in the ratios over the past five years show stability and consistent management of debt levels.
The debt-to-assets ratio has remained relatively stable around 0.36 to 0.39 over the past five years, indicating that roughly 36% to 39% of Avista Corp.'s assets are financed by debt. This suggests a prudent level of leverage in the company's capital structure.
The debt-to-capital ratio has also shown stability, ranging from 0.53 to 0.55, indicating that debt accounts for around 53% to 55% of Avista Corp.'s total capital. This reflects a balanced mix of debt and equity in funding the company's operations.
The debt-to-equity ratio has fluctuated slightly between 1.13 and 1.22 over the five-year period, with the most recent ratio at 1.20. This indicates that Avista Corp. relies more on debt financing compared to equity, with around $1.20 of debt for every dollar of equity. While this ratio has increased slightly, it still remains within reasonable levels.
The financial leverage ratio, which measures the company's total assets relative to its equity, has also shown consistency around 3.14 to 3.18 over the past five years. This suggests that Avista Corp. uses a higher proportion of debt to finance its assets compared to equity, with a leverage factor of around 3.
Overall, the solvency ratios of Avista Corp. demonstrate a stable and balanced approach to managing debt and capital structure, indicating a reasonable level of financial risk and capacity to meet its long-term obligations.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 49.98 | 35.18 | 41.13 | 35.19 | 3.22 |
The interest coverage ratio for Avista Corp. has shown some fluctuations over the past five years. In 2023, the ratio improved to 2.06 from 1.71 in 2022, indicating that the company's ability to cover its interest expenses with operating earnings has strengthened. However, this improvement came after a slight decline in 2022 from 2.31 in 2021. Overall, the trend in interest coverage suggests that Avista Corp. has generally been able to comfortably meet its interest obligations from its operating income, albeit with some variability in recent years.