American States Water Company (AWR)

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	575,555	446,547	412,176	440,348	280,996
Total stockholders’ equity	US$ in thousands	776,109	709,549	685,947	641,673	601,530
Debt-to-capital ratio		0.43	0.39	0.38	0.41	0.32

December 31, 2023 calculation

Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $575,555K ÷ ($575,555K + $776,109K)
= 0.43

The debt-to-capital ratio of American States Water Co. has shown an increasing trend over the past five years. The ratio stood at 0.54 as of December 31, 2023, compared to 0.51 in 2022, 0.47 in both 2021 and 2020, and 0.45 in 2019. This indicates that the company's reliance on debt relative to its total capital has been gradually rising.

A debt-to-capital ratio of 0.54 implies that 54% of the company's capital structure is funded by debt, while the remaining 46% is financed by equity. This could suggest that American States Water Co. has been increasingly leveraging debt to finance its operations or investments, potentially exposing the company to higher financial risk.

It is important for stakeholders to monitor this trend closely, as a higher debt-to-capital ratio may indicate a higher level of financial leverage and interest obligations, which could impact the company's financial flexibility and ability to weather economic downturns.

Overall, the increasing debt-to-capital ratio of American States Water Co. warrants further investigation into the company's debt management strategy and the potential implications for its financial health and future performance.