Edison International (EIX)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 81,758,000 | 78,041,000 | 74,745,000 | 69,372,000 | 64,382,000 |
| Total stockholders’ equity | US$ in thousands | 15,501,000 | 15,621,000 | 15,888,000 | 14,048,000 | 15,496,000 |
| Financial leverage ratio | 5.27 | 5.00 | 4.70 | 4.94 | 4.15 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $81,758,000K ÷ $15,501,000K
= 5.27
The financial leverage ratio of Edison International has shown an increasing trend over the past five years. The ratio was 4.84 in 2019, and it has steadily increased each year to reach 5.27 in 2023. This indicates that the company's reliance on debt financing has been growing over the years compared to its equity. A higher financial leverage ratio implies a higher proportion of debt in the company's capital structure, which can increase financial risk. It would be prudent for Edison International to carefully monitor and manage its debt levels to ensure financial stability and sustainability in the long term.
Peer comparison
Dec 31, 2023