Duke Energy Corporation (DUK)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 176,893,000 | 178,086,000 | 169,587,000 | 162,388,000 | 158,838,000 |
| Total stockholders’ equity | US$ in thousands | 49,112,000 | 49,322,000 | 49,296,000 | 47,964,000 | 46,822,000 |
| Financial leverage ratio | 3.60 | 3.61 | 3.44 | 3.39 | 3.39 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $176,893,000K ÷ $49,112,000K
= 3.60
The financial leverage ratio of Duke Energy Corp. has shown a slight fluctuation over the past five years. The ratio stood at 3.39 in both 2020 and 2019 before increasing to 3.44 in 2021. Subsequently, there was a marginal rise to 3.61 in 2022, followed by a small decrease to 3.60 in 2023.
A financial leverage ratio above 1 indicates that the company utilizes more debt than equity to finance its operations, and typically, a higher ratio suggests a higher level of financial risk. In the case of Duke Energy Corp., the trend of the ratio hovering around 3.4 to 3.6 indicates a consistent reliance on debt in its capital structure over the years.
Investors and creditors may view Duke Energy's financial leverage ratio as relatively high, indicating a significant debt burden compared to equity. It would be important for the company to carefully manage its debt levels to ensure financial stability and avoid potential solvency issues. Further analysis of the company's ability to service its debt obligations and the impact of changing interest rates on its financial position would provide a more comprehensive assessment of its financial leverage.
Peer comparison
Dec 31, 2023