American Water Works (AWK)

Debt-to-capital ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Long-term debt	US$ in thousands	—	—	—	11,807,000	9,770,000
Total stockholders’ equity	US$ in thousands	9,797,000	7,693,000	7,298,000	6,454,000	6,121,000
Debt-to-capital ratio		0.00	0.00	0.00	0.65	0.61

December 31, 2023 calculation

Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $—K ÷ ($—K + $9,797,000K)
= 0.00

The debt-to-capital ratio of American Water Works Co. Inc. has shown a fluctuating trend over the past five years. In 2023, the ratio decreased to 0.56 from 0.62 in 2022, indicating an improvement in the company's leverage position. This suggests that American Water Works Co. Inc. relied less on debt financing relative to its total capital structure in 2023.

Comparing the debt-to-capital ratio to previous years, we observe that the ratio has been somewhat volatile, with fluctuations between 0.60 and 0.63 from 2020 to 2022. The slight decrease in the ratio in 2023 may be a positive sign for the company, as it suggests a better balance between debt and equity in its capital structure.

Overall, the declining trend in the debt-to-capital ratio indicates that American Water Works Co. Inc. has potentially been managing its debt levels more effectively in recent years, which could enhance its financial stability and reduce the risks associated with excessive leverage.