Clearway Energy Inc Class C (CWEN)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.51 | 0.53 | 0.54 | 0.62 | 0.51 |
| Debt-to-capital ratio | 0.60 | 0.62 | 0.68 | 0.71 | 0.69 |
| Debt-to-equity ratio | 1.50 | 1.61 | 2.10 | 2.43 | 2.19 |
| Financial leverage ratio | 2.94 | 3.05 | 3.88 | 3.90 | 4.29 |
Clearway Energy Inc's solvency ratios have shown some fluctuations over the past five years.
1. Debt-to-assets ratio has remained relatively stable at around 0.55 to 0.70, indicating that between 55% to 70% of the company's assets are financed by debt.
2. Debt-to-capital ratio has fluctuated between 0.75 to 0.81, suggesting that the company's capital structure is comprised of debt between 75% to 81%.
3. Debt-to-equity ratio has varied from 3.05 to 4.20, indicating that Clearway Energy has relied more on debt financing than equity, with debt being between 3.05 to 4.20 times the equity.
4. Financial leverage ratio has ranged from 5.24 to 7.00, showing the company's reliance on debt in its capital structure has increased over the years, with the most recent value of 7.00 indicating high financial leverage.
Overall, Clearway Energy Inc's solvency ratios demonstrate a consistent reliance on debt financing to support its operations, which could pose risks in terms of financial stability and debt servicing capabilities, particularly with the increasing financial leverage ratio.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 1.23 | 4.47 | 1.20 | 1.08 | 0.95 |
Based on the data provided, Clearway Energy Inc's interest coverage ratio has fluctuated over the past five years. The interest coverage ratio measures the company's ability to meet its interest obligations with its earnings before interest and taxes (EBIT).
Clearway Energy's interest coverage ratio has been below 1.0 in four out of the five years, indicating that the company's earnings before interest and taxes may not be sufficient to cover its interest expenses. A ratio below 1.0 suggests that the company is not generating enough earnings to cover its interest payments.
The trend shows a slight improvement in 2022 and 2021, where the interest coverage ratio increased to 0.99 and 1.00 respectively, but decreased again in 2023 to 0.86. This consistent low interest coverage ratio over the years may raise concerns about the company's financial stability and its ability to service its debt obligations.
Overall, Clearway Energy Inc's interest coverage ratio indicates a potential risk due to its low level, which may require further monitoring and potential actions to improve the company's financial health.