CenterPoint Energy Inc (CNP)
Financial leverage ratio
| 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 43,768,000 | 42,893,000 | 40,976,000 | 40,199,000 | 39,715,000 | 39,001,000 | 38,097,000 | 37,752,000 | 38,546,000 | 36,719,000 | 36,216,000 | 35,202,000 | 37,679,000 | 37,160,000 | 36,466,000 | 35,906,000 | 33,471,000 | 32,705,000 | 32,148,000 | 33,395,000 |
| Total stockholders’ equity | US$ in thousands | 10,666,000 | 10,535,000 | 10,354,000 | 9,998,000 | 9,667,000 | 9,585,000 | 10,366,000 | 10,356,000 | 10,045,000 | 9,989,000 | 10,023,000 | 9,951,000 | 9,415,000 | 8,865,000 | 8,870,000 | 8,716,000 | 8,348,000 | 8,388,000 | 8,392,000 | 6,970,000 |
| Financial leverage ratio | 4.10 | 4.07 | 3.96 | 4.02 | 4.11 | 4.07 | 3.68 | 3.65 | 3.84 | 3.68 | 3.61 | 3.54 | 4.00 | 4.19 | 4.11 | 4.12 | 4.01 | 3.90 | 3.83 | 4.79 |
December 31, 2024 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $43,768,000K ÷ $10,666,000K
= 4.10
The financial leverage ratio of CenterPoint Energy Inc has shown some fluctuation over the past few years. The ratio decreased from 4.79 as of March 31, 2020, to 3.54 as of March 31, 2022, before slightly increasing to 3.68 by June 30, 2022. The ratio continued to vary between 3.54 and 4.19 up to December 31, 2024.
A financial leverage ratio above 1 indicates that the company is using more debt to finance its operations than equity, which can magnify returns on equity but also increase financial risk. A ratio of 3.54 to 4.19 suggests that CenterPoint Energy Inc has a significant amount of debt relative to its equity base.
It is essential for investors and stakeholders to monitor this ratio closely as it reflects the company's reliance on debt financing and its ability to meet its financial obligations. A decreasing trend in the financial leverage ratio may indicate that the company is reducing its reliance on debt, which could lead to improved financial stability in the long term. However, a sharp increase in the ratio could signal potential risks associated with high levels of debt.
Peer comparison
Dec 31, 2024