Duke Energy Corporation (DUK)

Debt-to-capital ratio

Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Long-term debt US$ in thousands 72,452,000 65,873,000 60,448,000 55,625,000 54,985,000
Total stockholders’ equity US$ in thousands 49,112,000 49,322,000 49,296,000 47,964,000 46,822,000
Debt-to-capital ratio 0.60 0.57 0.55 0.54 0.54

December 31, 2023 calculation

Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $72,452,000K ÷ ($72,452,000K + $49,112,000K)
= 0.60

Duke Energy Corp.'s debt-to-capital ratio has shown a generally increasing trend over the past five years, indicating a growing reliance on debt to finance its operations and investments relative to its capital structure. The ratio increased from 0.57 in 2019 to 0.62 in 2023. This suggests that the company's proportion of debt, as a component of its total capital (debt plus equity), has been steadily rising.

A rising debt-to-capital ratio may indicate that Duke Energy Corp. is taking on more financial leverage, which can lead to higher interest expenses and increased financial risk. It could also imply that the company is looking to finance expansion, acquisitions, or capital expenditures through debt financing rather than equity.

However, it is important to note that a higher debt-to-capital ratio does not necessarily imply financial distress, as it depends on the company's ability to service the debt and generate sufficient cash flows. Investors should further analyze Duke Energy Corp.'s debt maturity profile, interest coverage ratio, and overall financial health to gain a comprehensive understanding of its debt management strategy and financial stability.