California Water Service Group (CWT)

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	4,595,530	4,041,360	3,990,200	3,886,860	4,264,810	3,806,400	3,682,750	3,639,240	3,623,270	3,679,690	3,548,750	3,471,470	3,394,250	3,506,430	3,359,930	3,240,840	3,111,310	3,023,250	2,964,600	2,900,660
Total stockholders’ equity	US$ in thousands	1,426,730	1,410,670	1,389,520	1,298,200	1,317,590	1,273,460	1,202,520	1,164,630	1,177,590	1,115,970	997,118	929,802	921,344	890,192	782,023	755,140	779,906	757,795	723,164	714,129
Financial leverage ratio		3.22	2.86	2.87	2.99	3.24	2.99	3.06	3.12	3.08	3.30	3.56	3.73	3.68	3.94	4.30	4.29	3.99	3.99	4.10	4.06

December 31, 2023 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $4,595,530K ÷ $1,426,730K
= 3.22

The financial leverage ratio of California Water Service Group has shown fluctuations over the past eight quarters. The ratio ranged from a low of 2.86 in Q3 2023 to a high of 3.22 in Q4 2023. This indicates that the company's financial leverage, or the proportion of debt in its capital structure, has been varying.

A ratio above 1 indicates that the company has more debt than equity in its capital structure. A higher financial leverage ratio suggests higher financial risk as the company relies more on debt financing, which can lead to increased interest payments and potential financial distress in times of economic uncertainty.

The company's financial leverage ratios have generally been above 2.9 over the past eight quarters, indicating a significant reliance on debt to finance its operations and investments. It is noteworthy that the ratio has been relatively stable around this level with slight fluctuations.

Investors and creditors typically assess a company's financial leverage ratio to evaluate its ability to meet its debt obligations and manage financial risks effectively. The trend in California Water Service Group's financial leverage ratio reflects the company's financing strategy and its exposure to the risks associated with debt financing.