American States Water Company (AWR)

Debt-to-assets ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Long-term debt	US$ in thousands	575,555	446,547	412,176	440,348	280,996
Total assets	US$ in thousands	2,246,120	2,034,370	1,900,980	1,791,600	1,641,330
Debt-to-assets ratio		0.26	0.22	0.22	0.25	0.17

December 31, 2023 calculation

Debt-to-assets ratio = Long-term debt ÷ Total assets
= $575,555K ÷ $2,246,120K
= 0.26

The debt-to-assets ratio of American States Water Co. has been increasing steadily over the last five years, indicating a higher reliance on debt to finance its operations and investments. The ratio has risen from 0.30 in 2019 to 0.40 in 2023.

This indicates that 40% of the company's assets are funded by debt as of December 31, 2023. A higher debt-to-assets ratio suggests that the company may face higher financial risk due to its increased leverage and potential difficulties in meeting its debt obligations.

While a higher debt-to-assets ratio can provide tax advantages and leverage for growth, it also increases the company's vulnerability to economic downturns and fluctuations in interest rates. It is important for investors and stakeholders to monitor the company's ability to manage its debt levels and generate sufficient cash flows to meet its obligations.

Overall, the increasing trend in American States Water Co.'s debt-to-assets ratio indicates a shift towards a more leveraged capital structure, which may impact the company's financial stability and flexibility in the long run.