American States Water Company (AWR)

Financial leverage ratio

Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Total assets US$ in thousands 2,500,210 2,246,120 2,034,370 1,900,980 1,791,600
Total stockholders’ equity US$ in thousands 920,051 776,109 709,549 685,947 641,673
Financial leverage ratio 2.72 2.89 2.87 2.77 2.79

December 31, 2024 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $2,500,210K ÷ $920,051K
= 2.72

The financial leverage ratio of American States Water Company has shown some fluctuation over the past five years. In December 31, 2020, the ratio was at 2.79, slightly decreasing to 2.77 by December 31, 2021. Subsequently, there was an increase in the ratio to 2.87 by the end of December 31, 2022, and a further rise to 2.89 by December 31, 2023. However, by the end of December 31, 2024, the ratio decreased to 2.72.

Overall, the company's financial leverage ratio has generally remained around the range of 2.7 to 2.9 over the five-year period, indicating that American States Water Company relies more on debt financing than equity. It is important for the company to carefully manage its leverage ratio to ensure a healthy balance between debt and equity to maximize financial stability and growth opportunities.