Constellation Energy Corp (CEG)

Constellation Energy Corporation's solvency ratios provide valuable insights into the company's financial stability and ability to meet its long-term obligations.

The debt-to-assets ratio has shown a slight fluctuation over the past four years, increasing from 0.15 in 2020 to 0.18 in 2023. This indicates that Constellation Energy Corporation's level of debt relative to its total assets has increased slightly, which may suggest a higher dependency on debt financing.

The debt-to-capital ratio has also demonstrated an upward trend, rising from 0.37 in 2020 to 0.46 in 2023. This indicates that a larger proportion of Constellation Energy Corporation's capital structure is comprised of debt as opposed to equity. A higher debt-to-capital ratio may signify higher financial risk for the company.

The debt-to-equity ratio has shown significant variability over the past four years, increasing from 0.58 in 2020 to 0.85 in 2023. This indicates that Constellation Energy Corporation's reliance on debt financing in relation to equity has increased notably, possibly signaling a higher level of financial leverage and risk.

The financial leverage ratio, which measures the extent to which a company uses debt to finance its operations, has been steadily increasing, reaching 4.65 in 2023 from 3.88 in 2020. This suggests that Constellation Energy Corporation has been increasingly utilizing debt to generate earnings and fund its investments, potentially leading to higher financial risk and leverage.

Overall, the solvency ratios of Constellation Energy Corporation demonstrate a trend towards higher levels of debt relative to assets, capital, and equity over the past four years. This suggests that the company's financial structure has become more leveraged, which may pose risks in terms of its ability to meet debt obligations and withstand financial turbulence. Investors and stakeholders should closely monitor these solvency ratios to assess Constellation Energy Corporation's financial health and risk exposure.

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Coverage ratios

The interest coverage ratio of Constellation Energy Corporation has shown an improving trend over the past four years. The ratio increased from 0.66 in 2020 to 3.65 in 2023, indicating that the corporation's ability to cover its interest expenses with its operating income has strengthened significantly.

In 2021, the company had a negative interest coverage ratio of -1.88, which suggests that its operating income was insufficient to cover its interest expenses during that period. However, the company managed to turn this around in the following years and improve its financial position.

Overall, the upward trend in the interest coverage ratio indicates that Constellation Energy Corporation's ability to meet its interest obligations from its operating earnings has improved, reflecting positively on its financial health and stability.