Edison International (EIX)

The solvency ratios of Edison International, as indicated by the Debt-to-assets, Debt-to-capital, Debt-to-equity, and Financial leverage ratios, have exhibited a generally increasing trend over the past five years.

The Debt-to-assets ratio has shown a consistent uptrend, indicating a higher proportion of debt relative to assets on the company's balance sheet. This suggests that a greater portion of the company's assets are financed through debt, which may increase financial risk.

Similarly, the Debt-to-capital ratio has also increased over the years, reflecting a rising dependency on debt for funding the company's operations in relation to its total capital structure. This can imply a higher level of leverage in Edison International's capital structure.

The Debt-to-equity ratio has elevated significantly, demonstrating a rising level of financial leverage and indicating that a larger portion of the company's assets are funded by debt as opposed to equity. A higher Debt-to-equity ratio signifies higher financial risk as the company relies more on borrowed funds to finance its operations and investments.

The Financial leverage ratio, which indicates the extent to which a company is using debt to fund its operations, has also experienced an upward trajectory. This signifies that the company has been increasingly relying on debt to finance its assets, leading to higher financial leverage and potential risks associated with debt obligations.

Overall, the increasing trend in these solvency ratios suggests that Edison International has been progressively utilizing more debt to finance its operations and investments, which may indicate heightened financial risk and leverage in its capital structure.

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Coverage ratios

The interest coverage ratio for Edison International over the past five years has shown fluctuating trends, ranging from a low of 2.45 in 2023 to a high of 3.05 in 2021. This ratio measures the company's ability to meet its interest obligations using its operating income. Generally, a higher interest coverage ratio indicates a better ability to cover interest expenses with operating income. Despite some variability, the company has maintained relatively strong interest coverage levels above 2 in each of the past five years, suggesting a sufficient ability to pay off its interest expenses. However, it is important for Edison International to monitor this ratio closely to ensure that the company can continue to meet its interest obligations comfortably in the future.