CenterPoint Energy Inc (CNP)

Solvency ratios

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 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Debt-to-assets ratio 0.44 0.43 0.42 0.42 0.38 0.37 0.37 0.34 0.41 0.41 0.43 0.39 0.34 0.37 0.34 0.41 0.40 0.40 0.41 0.41
Debt-to-capital ratio 0.64 0.64 0.61 0.60 0.60 0.57 0.57 0.55 0.62 0.63 0.64 0.62 0.58 0.59 0.57 0.66 0.63 0.63 0.63 0.63
Debt-to-equity ratio 1.82 1.76 1.55 1.52 1.48 1.34 1.32 1.22 1.65 1.74 1.79 1.61 1.38 1.42 1.30 1.98 1.70 1.68 1.71 1.67
Financial leverage ratio 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 4.25 4.15 4.14 4.13

The solvency ratios of Centerpoint Energy Inc. demonstrate the company's ability to meet its long-term financial obligations and manage its debt levels effectively.

The Debt-to-assets ratio has remained relatively stable between 0.42 to 0.48 over the past year, indicating that approximately 42% to 48% of the company's assets are financed by debt. This ratio suggests that Centerpoint Energy relies moderately on debt to finance its operations and investments.

The Debt-to-capital ratio has also shown consistency, ranging from 0.60 to 0.67. This ratio reflects the proportion of the company's capital that is funded by debt, with values indicating that around 60% to 67% of the capital structure is comprised of debt.

The Debt-to-equity ratio has fluctuated between 1.47 to 1.99, revealing the company's increasing reliance on debt financing compared to equity. A higher ratio implies higher financial risk, as a larger portion of the company's assets are funded by debt, which could potentially result in higher interest payments.

Lastly, the Financial leverage ratio has ranged from 3.54 to 4.11, indicating the company's ability to utilize debt to magnify returns to shareholders. This ratio reflects the extent to which Centerpoint Energy employs debt in its capital structure to generate earnings for equity shareholders.

Overall, while Centerpoint Energy Inc. maintains a balanced level of debt in its capital structure, there are signs of increasing leverage over time, which may warrant close monitoring to ensure the company's solvency and financial stability in the long run.

Coverage ratios

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 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Interest coverage 2.51 2.81 2.89 3.15 2.99 2.80 3.23 4.03 7.03 41.00 — — 51.95 48.00 3.84 3.75 6.83 5.74 4.73 14.65

Centerpoint Energy Inc.'s interest coverage has been fluctuating over the past eight quarters, ranging from a low of 67.32 in Q1 2022 to a high of 184.33 in Q2 2023. Generally, a higher interest coverage ratio indicates that the company is more capable of meeting its interest obligations using its operating income.

The interest coverage ratio shows an upward trend from Q1 2022 to Q2 2023, reflecting an improvement in the company's ability to cover its interest expenses. This positive trend may indicate improved financial health and stability for Centerpoint Energy Inc.

While the interest coverage ratio has shown fluctuations, it has generally been above 1, indicating that the company's earnings are sufficient to cover its interest expenses. However, investors and creditors may prefer a more consistent and higher interest coverage ratio for increased financial security.

It is important for Centerpoint Energy Inc. to continue monitoring and maintaining a healthy interest coverage ratio to ensure it can comfortably meet its debt obligations and sustain its financial position in the long term.