CenterPoint Energy Inc (CNP)
Debt-to-equity ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Long-term debt | US$ in thousands | 17,559,000 | 14,836,000 | 15,558,000 | 11,521,000 | 14,244,000 |
| Total stockholders’ equity | US$ in thousands | 9,667,000 | 10,042,000 | 9,415,000 | 8,348,000 | 8,359,000 |
| Debt-to-equity ratio | 1.82 | 1.48 | 1.65 | 1.38 | 1.70 |
December 31, 2023 calculation
Debt-to-equity ratio = Long-term debt ÷ Total stockholders’ equity
= $17,559,000K ÷ $9,667,000K
= 1.82
The debt-to-equity ratio of Centerpoint Energy Inc. has varied over the past five years, ranging from 1.72 to 1.99. The ratio indicates the proportion of debt used to finance the company's operations relative to shareholders' equity. A higher debt-to-equity ratio suggests that the company is relying more on debt financing, which can potentially indicate increased financial risk due to higher interest expenses and debt obligations.
In 2023, the debt-to-equity ratio increased to 1.99 from 1.74 in 2022, showing a higher dependency on debt to fund its operations compared to the previous year. This may signify that Centerpoint Energy has taken on more debt, which could be for various reasons such as expansion, acquisitions, or capital investments. Investors and creditors may closely monitor this increase in leverage to assess the company's ability to manage its debt levels and meet its financial obligations.
Comparing the 2023 ratio to historical trends, Centerpoint Energy's debt-to-equity ratio is higher than the ratios reported in 2021 and 2022 but lower than the ratio in 2019. This indicates fluctuations in the company's capital structure over the years. It is important for stakeholders to evaluate the reasons behind these changes and assess the company's overall financial health and risk profile.
Peer comparison
Dec 31, 2023