Chesapeake Utilities Corporation (CPK)
Financial leverage ratio
| 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 3,304,700 | 2,240,750 | 2,204,490 | 2,197,550 | 2,215,040 | 2,157,420 | 2,117,340 | 2,109,630 | 2,114,870 | 2,021,830 | 1,972,340 | 1,953,950 | 1,932,490 | 1,888,090 | 1,822,180 | 1,788,220 | 1,783,200 | 1,714,240 | 1,681,040 | 1,682,800 |
| Total stockholders’ equity | US$ in thousands | 1,246,100 | 866,677 | 864,228 | 858,588 | 832,801 | 814,438 | 815,701 | 805,512 | 774,130 | 750,962 | 741,564 | 726,388 | 697,085 | 616,690 | 593,277 | 584,129 | 561,577 | 544,711 | 544,384 | 543,659 |
| Financial leverage ratio | 2.65 | 2.59 | 2.55 | 2.56 | 2.66 | 2.65 | 2.60 | 2.62 | 2.73 | 2.69 | 2.66 | 2.69 | 2.77 | 3.06 | 3.07 | 3.06 | 3.18 | 3.15 | 3.09 | 3.10 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $3,304,700K ÷ $1,246,100K
= 2.65
The financial leverage ratio for Chesapeake Utilities Corp has been relatively stable over the past eight quarters, ranging between 2.55 and 2.66. This ratio indicates that the company relies heavily on debt financing to support its operations and growth initiatives. A ratio above 1 suggests that the company has more debt than equity in its capital structure.
While a higher financial leverage ratio can magnify returns on equity when operating income is sufficient to cover interest expenses, it also increases the risk of financial distress in case of economic downturns or fluctuations in interest rates. Investors and creditors typically perceive a higher financial leverage ratio as a sign of higher financial risk.
Chesapeake Utilities Corp's consistent financial leverage ratio suggests a continued reliance on debt financing to fund its operations and investments. It is essential for the company to closely monitor and effectively manage its debt levels to ensure sustainable growth and financial stability in the long term.
Peer comparison
Dec 31, 2023