California Water Service Group (CWT)
Debt-to-equity ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Long-term debt | US$ in thousands | 1,052,770 | 1,052,490 | 1,055,790 | 781,100 | 786,754 |
| Total stockholders’ equity | US$ in thousands | 1,426,730 | 1,317,590 | 1,177,590 | 921,344 | 779,906 |
| Debt-to-equity ratio | 0.74 | 0.80 | 0.90 | 0.85 | 1.01 |
December 31, 2023 calculation
Debt-to-equity ratio = Long-term debt ÷ Total stockholders’ equity
= $1,052,770K ÷ $1,426,730K
= 0.74
The debt-to-equity ratio of California Water Service Group has exhibited a declining trend over the past five years, decreasing from 1.26 in 2019 to 0.86 in 2023. This indicates that the company has been relying less on debt and more on equity to finance its operations and growth. A lower debt-to-equity ratio generally suggests a lower financial risk as the company has a lower level of debt relative to its equity.
The decrease in the ratio from 2020 to 2023 may indicate that the company has been actively reducing its debt levels or increasing its equity base, which could be a positive sign for investors and creditors. However, it's essential to assess the company's overall financial health, as a very low debt-to-equity ratio may also imply that the company is not taking advantage of leverage for potential growth opportunities.
In conclusion, the declining trend in California Water Service Group's debt-to-equity ratio from 2019 to 2023 signals a shift towards a stronger equity position and potentially lower financial risk. It would be beneficial to continue monitoring this ratio alongside other financial metrics to gain a comprehensive understanding of the company's financial standing and performance.
Peer comparison
Dec 31, 2023