American Water Works (AWK)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 30,298,000 | 27,787,000 | 26,075,000 | 24,766,000 | 22,682,000 |
| Total stockholders’ equity | US$ in thousands | 9,797,000 | 7,693,000 | 7,298,000 | 6,454,000 | 6,121,000 |
| Financial leverage ratio | 3.09 | 3.61 | 3.57 | 3.84 | 3.71 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $30,298,000K ÷ $9,797,000K
= 3.09
The financial leverage ratio of American Water Works Co. Inc. has exhibited fluctuations over the past five years. In 2023, the financial leverage ratio stands at 3.09, a decrease from the previous year's ratio of 3.61 in 2022. This could indicate a slight improvement in the company's ability to cover its financial obligations using debt financing.
Comparing 2023 to 2021 and 2020, we observe that the financial leverage ratio has been somewhat volatile, with ratios of 3.57 and 3.84, respectively. The higher ratio in 2020 suggests the company may have been more heavily reliant on debt to finance its operations and investments.
In 2019, the financial leverage ratio was 3.71, which was higher than the current ratio in 2023, indicating a potential reduction in financial risk associated with leverage.
Overall, American Water Works Co. Inc.'s financial leverage ratio has shown variability over the years, and it is essential for stakeholders to monitor this metric to assess the company's capital structure and financial risk management strategies.
Peer comparison
Dec 31, 2023