Black Hills Corporation (BKH)

Solvency ratios

	Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020
Debt-to-assets ratio	0.42	0.44	0.42	0.39	0.40	0.38	0.42	0.42	0.38	0.44	0.45	0.45	0.45	0.46	0.40	0.41	0.44	0.45	0.46	0.41
Debt-to-capital ratio	0.55	0.55	0.56	0.53	0.54	0.55	0.56	0.56	0.55	0.59	0.59	0.59	0.60	0.60	0.57	0.57	0.58	0.58	0.58	0.55
Debt-to-equity ratio	1.21	1.23	1.27	1.14	1.18	1.20	1.27	1.28	1.20	1.43	1.43	1.44	1.48	1.53	1.33	1.34	1.38	1.40	1.41	1.24
Financial leverage ratio	2.86	2.82	3.03	2.90	2.99	3.14	3.03	3.05	3.21	3.23	3.17	3.18	3.28	3.30	3.29	3.31	3.16	3.11	3.06	3.03

Based on the solvency ratios of Black Hills Corporation, we observe the following trends:

1. Debt-to-assets ratio: The company's debt-to-assets ratio has fluctuated slightly over the years but has generally remained below 0.50, indicating that Black Hills Corporation has a conservative level of debt relative to its total assets. The ratio peaked at 0.46 in June 2020 but has since decreased to 0.42 by December 2024.

2. Debt-to-capital ratio: The debt-to-capital ratio reflects the proportion of the company's capital structure that is financed by debt. Black Hills Corporation has maintained a fairly stable debt-to-capital ratio over the years, hovering around 0.55 to 0.60. This indicates that the company relies moderately on debt to finance its operations and investments.

3. Debt-to-equity ratio: The debt-to-equity ratio measures the extent to which a company is leveraged through debt. Black Hills Corporation's debt-to-equity ratio has shown a declining trend over the years, indicating that the company has been reducing its reliance on debt financing relative to equity. The ratio decreased from 1.41 in June 2020 to 1.21 by December 2024.

4. Financial leverage ratio: The financial leverage ratio provides insight into the company's overall financial risk by comparing its total assets to shareholders' equity. Black Hills Corporation's financial leverage ratio has exhibited some fluctuation but has generally trended downwards, indicating a reduction in financial risk over time. The ratio decreased from 3.31 in March 2021 to 2.86 by December 2024.

In summary, Black Hills Corporation has maintained a prudent approach to managing its solvency, with a conservative level of debt relative to its assets and capital. The company has shown a trend of decreasing reliance on debt financing, which has contributed to a lower level of financial risk and improved solvency position over the years.

Coverage ratios

	Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020
Interest coverage	2.77	2.63	2.85	2.89	2.82	2.67	2.63	2.75	2.83	2.82	2.92	2.90	2.69	2.80	2.79	2.84	2.99	3.08	3.00	2.90

The interest coverage ratio measures a company's ability to pay interest expenses on its outstanding debt. A higher ratio indicates a company's ability to meet its interest obligations, while a lower ratio may signal potential financial distress.

Analyzing Black Hills Corporation's interest coverage over the specified period from March 31, 2020, to December 31, 2024, the ratios have ranged from a low of 2.63 to a high of 3.08. The trend shows some fluctuations but generally hovers around the 2.8 mark.

Black Hills Corporation's interest coverage ratio fluctuated within a relatively narrow range over the period, indicating that the company's earnings were consistently able to cover its interest expenses, albeit with some variability.

However, it is worth noting that the ratios are on the lower end of the spectrum, which may suggest that the company has a modest buffer to cover interest expenses. Investors and creditors may monitor this ratio closely to ensure the company remains able to service its debt obligations efficiently.