Black Hills Corporation (BKH)

Black Hills Corporation's solvency ratios have shown trends over the past five years.

1. Debt-to-assets ratio: The ratio has fluctuated slightly between 0.46 to 0.50 over the five-year period. This indicates that, on average, 46% to 50% of the company's assets were financed using debt. The decrease in 2023 compared to the prior year suggests a slightly lower reliance on debt for financing assets.

2. Debt-to-capital ratio: This ratio has followed a similar trend to the debt-to-assets ratio, ranging from 0.58 to 0.62. This ratio measures the proportion of total capital provided by debt. Black Hills Corporation has maintained a relatively consistent level of debt in its capital structure over the years.

3. Debt-to-equity ratio: The ratio has ranged from 1.37 to 1.63, indicating that the company has been moderately leveraged with debt compared to equity. The decrease in 2023 compared to the previous year suggests a slight improvement in the proportion of debt to equity, which could imply a lower financial risk.

4. Financial leverage ratio: This ratio measures the extent to which a company is using debt to finance its operations. Black Hills Corporation's financial leverage ratio has ranged from 2.99 to 3.28. The slight decrease in the ratio in 2023 compared to 2022 indicates a lower level of financial risk and reliance on debt financing.

Overall, the solvency ratios of Black Hills Corporation suggest a moderate level of leverage, with some fluctuations in debt levels over the five-year period. The decreasing trend in some ratios in 2023 compared to the prior year could indicate an effort to reduce reliance on debt and improve financial stability.

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Coverage ratios

Interest coverage is a financial ratio used to evaluate a company's ability to meet its interest obligations on outstanding debt. It is calculated by dividing earnings before interest and taxes (EBIT) by the interest expense incurred during a specific period. A higher interest coverage ratio indicates that a company is more capable of servicing its interest payments.

Analyzing Black Hills Corporation's interest coverage over the past five years shows some fluctuations. In 2023, the interest coverage ratio was 2.82, slightly lower than the previous year's ratio of 2.83. Despite this slight decrease, the company still demonstrated sufficient earnings to cover its interest expenses.

Comparing the ratios to earlier years, it is evident that there have been minor fluctuations in interest coverage, with ratios ranging from 2.69 to 2.99. This indicates that Black Hills Corporation has maintained a consistent ability to meet its interest obligations over the years, albeit with some variability.

Overall, Black Hills Corporation's interest coverage seems relatively stable, suggesting that the company has been generating enough earnings to comfortably cover its interest expenses. However, it is important to monitor this ratio in conjunction with other financial metrics to assess the company's overall financial health and risk levels.