Dominion Energy Inc (D)
Financial leverage ratio
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 102,415,000 | 109,032,000 | 104,243,000 | 99,590,000 | 95,905,000 |
| Total stockholders’ equity | US$ in thousands | 25,153,000 | 27,529,000 | 27,881,000 | 27,308,000 | 26,117,000 |
| Financial leverage ratio | 4.07 | 3.96 | 3.74 | 3.65 | 3.67 |
December 31, 2024 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $102,415,000K ÷ $25,153,000K
= 4.07
The financial leverage ratio of Dominion Energy Inc has shown a relatively stable trend over the years, decreasing slightly from 3.67 in December 2020 to 3.65 in December 2021, then increasing to 3.74 in December 2022, further rising to 3.96 in December 2023, and reaching 4.07 by December 2024.
This trend indicates that Dominion Energy Inc has been gradually increasing its reliance on debt to finance its operations and investments, which may suggest a higher level of financial risk. A higher financial leverage ratio means that the company has a higher proportion of debt in its capital structure compared to equity. While debt can provide tax benefits and leverage returns, it can also increase the company's financial vulnerability, especially in challenging economic conditions or if interest rates rise.
Investors and creditors should closely monitor Dominion Energy Inc's financial leverage ratio to assess its ability to meet its debt obligations and sustain its operations over the long term. Additionally, management should exercise prudence in managing the company's debt levels to maintain a healthy balance between debt and equity financing.
Peer comparison
Dec 31, 2024