Dominion Energy Inc (D)
Solvency ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 4.07 | 3.96 | 3.74 | 3.65 | 3.67 |
Based on the provided data for Dominion Energy Inc, the solvency ratios demonstrate a stable and healthy financial position over the years.
1. Debt-to-assets ratio: This ratio measures the proportion of a company's assets that are financed through debt. Dominion Energy Inc has consistently maintained a debt-to-assets ratio of 0.00 across the years from 2020 to 2024. This indicates that the company relies minimally on debt to finance its assets, reflecting a strong financial position and low financial risk.
2. Debt-to-capital ratio: The debt-to-capital ratio compares a company's total debt to its total capital (debt + equity). Similar to the debt-to-assets ratio, Dominion Energy Inc shows a consistent debt-to-capital ratio of 0.00 throughout the years analyzed. This implies that the company's capital structure is primarily equity-funded, further highlighting its stability and financial strength.
3. Debt-to-equity ratio: The debt-to-equity ratio measures the proportion of a company's financing that comes from debt compared to equity. Dominion Energy Inc maintains a debt-to-equity ratio of 0.00 from 2020 to 2024. This signifies that the company has no debt relative to its equity, indicating a strong equity base and minimal financial leverage.
4. Financial leverage ratio: The financial leverage ratio provides insight into the level of financial risk a company carries due to its debt. Dominion Energy Inc's financial leverage ratio has shown a slight increase over the years, from 3.67 in 2020 to 4.07 in 2024. While the increase signals a higher reliance on debt, the overall ratio remains at a moderate level, suggesting manageable financial risk for the company.
In summary, Dominion Energy Inc maintains a conservative approach to debt management, with consistently low debt-related ratios and a moderately increasing financial leverage ratio. This indicates a solid solvency position and the ability to meet financial obligations effectively.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 2.16 | 2.26 | 3.45 | 1.92 | 2.98 |
The interest coverage ratio for Dominion Energy Inc indicates the company's ability to meet its interest obligations with its operating income. In December 2020, the interest coverage ratio stood at 2.98, suggesting that the company generated operating income almost three times higher than its interest expenses.
However, by December 2021, the interest coverage ratio decreased to 1.92, implying a slight weakening in the company's ability to cover its interest payments. This may raise concerns about the company's financial health and its capacity to service its debt obligations effectively.
In December 2022, the interest coverage ratio improved to 3.45, showing a recovery in Dominion Energy's ability to meet its interest expenses with operating income. This indicates a more favorable financial position compared to the previous year.
The interest coverage ratio declined again in December 2023 to 2.26, which could imply that Dominion Energy faced challenges in generating sufficient operating income to cover its interest payments adequately.
By December 2024, the interest coverage ratio decreased further to 2.16, suggesting a continued strain on the company's ability to cover its interest obligations with operating income. This downward trend may warrant a closer examination of the company's financial strategies and debt management practices to ensure long-term sustainability.