American Water Works (AWK)
Solvency ratios
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.48 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.65 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 1.83 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 3.18 | 3.07 | 3.07 | 3.11 | 3.09 | 3.01 | 3.04 | 2.96 | 3.61 | 3.50 | 3.51 | 3.44 | 3.57 | 3.69 | 3.73 | 3.73 | 3.84 | 3.75 | 3.79 | 3.77 |
American Water Works has shown a consistently low Debt-to-assets ratio over the past few years, indicating that the company has a minimal level of debt relative to its total assets. This suggests a strong ability to cover its debt obligations with its available assets.
The Debt-to-capital ratio, which measures the proportion of debt used to finance the company's operations, has also remained very low, indicating a conservative capital structure with a significant reliance on equity financing rather than debt.
The Debt-to-equity ratio shows a spike in December 2020 but quickly returns to a negligible level, signaling that American Water Works mainly relies on equity to fund its operations, which can be seen as a positive sign for potential investors.
The Financial leverage ratio has fluctuated over the period, but generally decreasing from a relatively high level in 2020 to a more moderate level in 2023 and 2024. This suggests that the company has been managing its financial leverage effectively, reducing the risk of financial distress.
Overall, based on these solvency ratios, American Water Works appears to have a strong financial position with a prudent approach to managing its debt and capital structure.
Coverage ratios
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | 3.28 | 3.20 | 3.17 | 3.27 | 3.27 | 3.20 | 3.16 | 2.95 | 2.94 | 2.93 | 2.95 | 3.00 | 2.97 | 3.11 | 3.16 | 3.12 | 3.16 | 3.07 | 3.02 | 3.04 |
American Water Works' interest coverage ratio has shown stability over the past few years, ranging between 2.93 and 3.28. This ratio indicates the company's ability to meet its interest payment obligations using its operating income.
The interest coverage ratio above 1 suggests that the company generates enough operating income to cover its interest expenses. American Water Works' interest coverage ratio consistently above 2 indicates a healthy financial position, demonstrating the company's ability to comfortably meet its interest obligations.
However, a slight downward trend since 2022, with a dip to 2.93 in September 2022 and fluctuation around the 3 mark in subsequent periods, warrants attention. It is essential for investors and stakeholders to monitor this trend carefully to ensure that the company maintains a comfortable margin to cover its interest payments.