Black Hills Corporation (BKH)

Debt-to-capital ratio

Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Long-term debt US$ in thousands 4,250,200 3,801,200 3,607,300 4,126,920 3,528,100
Total stockholders’ equity US$ in thousands 3,501,500 3,215,300 2,994,900 2,787,090 2,561,380
Debt-to-capital ratio 0.55 0.54 0.55 0.60 0.58

December 31, 2024 calculation

Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $4,250,200K ÷ ($4,250,200K + $3,501,500K)
= 0.55

The debt-to-capital ratio of Black Hills Corporation has shown a relatively stable trend over the past five years. Starting at 0.58 in December 31, 2020, the ratio increased slightly to 0.60 by December 31, 2021. However, it then decreased to 0.55 by December 31, 2022, and maintained the same level for the following two years.

This ratio indicates the proportion of a company's capital that is financed by debt, with values closer to 1 implying higher debt levels relative to total capital. Black Hills Corporation's decreasing trend from 2021 to 2022 suggests a reduction in debt relative to total capital, which could indicate improved financial stability and reduced financial risk. The subsequent stability of the ratio at 0.55 indicates a consistent balance between debt and equity financing over the last two years.

Overall, the trend in the debt-to-capital ratio of Black Hills Corporation reflects a prudent approach to managing its capital structure, maintaining a reasonable level of debt relative to its total capital base.