California Water Service Group (CWT)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.23 | 0.25 | 0.29 | 0.23 | 0.25 |
| Debt-to-capital ratio | 0.42 | 0.44 | 0.47 | 0.46 | 0.50 |
| Debt-to-equity ratio | 0.74 | 0.80 | 0.90 | 0.85 | 1.01 |
| Financial leverage ratio | 3.22 | 3.24 | 3.08 | 3.68 | 3.99 |
The solvency ratios of California Water Service Group have shown a consistent trend in improving solvency and reduced reliance on debt over the past five years. The debt-to-assets ratio has decreased from 0.32 in 2019 to 0.27 in 2023, indicating that the company's assets are increasingly funded by equity rather than debt.
Similarly, the debt-to-capital ratio has remained steady at around 0.46 to 0.48 over the past three years, suggesting a stable balance between debt and capital in funding the company's operations. The debt-to-equity ratio has shown a substantial improvement from 1.26 in 2019 to 0.86 in 2023, demonstrating a significant decrease in the company's reliance on debt in comparison to equity.
The financial leverage ratio, which measures the company's total assets relative to equity, has decreased from 3.99 in 2019 to 3.22 in 2023. This indicates that the company's dependence on debt financing has decreased, resulting in a more conservative capital structure.
Overall, the trend in these solvency ratios suggests an improvement in the company's financial health and reduced financial risk due to lower leverage levels and a more balanced mix of debt and equity in its capital structure.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 1.64 | 3.02 | 3.04 | 3.51 | 2.62 |
The interest coverage ratio measures a company's ability to pay interest expenses on outstanding debt using its operating income. A higher interest coverage ratio indicates that the company is more capable of meeting its interest obligations.
Analyzing California Water Service Group's interest coverage over the past five years, we observe fluctuations in the ratio. In 2023, the interest coverage ratio decreased to 1.92, a decline from the previous year's ratio of 3.36. This suggests that the company's ability to cover its interest expenses with operating income weakened in 2023.
Comparing to earlier years, in 2022, the interest coverage ratio was 3.36, demonstrating an improvement from both 2021 and 2020 when the ratios were 3.46 and 3.33, respectively. This indicates that the company was more efficient in meeting its interest obligations in 2022.
In 2019, the interest coverage ratio was 2.94, showing a lower ability to cover interest expenses compared to the subsequent years. Overall, fluctuations in the interest coverage ratio over the past five years indicate varying levels of financial risk and operational performance for California Water Service Group. Further analysis of the company's financial health and debt management strategies may provide additional insights into these fluctuations.