American Water Works (AWK)

Debt-to-equity 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-equity ratio		0.00	0.00	0.00	1.83	1.60

December 31, 2023 calculation

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

The debt-to-equity ratio of American Water Works Co. Inc. has experienced fluctuations over the past five years. In 2023, the ratio stands at 1.26, indicating a decrease from the prior year. This suggests that the company relied less on debt financing relative to equity financing in 2023 compared to 2022. However, when looking at a longer-term trend, the debt-to-equity ratio in 2023 is still higher than in 2021 and 2019, signifying a higher level of debt relative to equity in the current year.

The company's debt-to-equity ratio peaked in 2020 at 1.70, which may indicate increased leverage during that period. Since then, there has been a gradual decline in this ratio, implying a potential improvement in the company's debt management practices or a shift towards a more equity-based financing structure. Overall, the trend in American Water Works Co. Inc.'s debt-to-equity ratio reflects varying levels of leveraging over the years, highlighting the interplay between debt and equity in the company's capital structure.