Eversource Energy (ES)
Solvency ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 2.74 | 3.92 | 3.44 | 3.32 | 3.28 |
Eversource Energy's solvency ratios reflect a strong financial position with consistently low debt levels relative to its assets, capital, and equity. The debt-to-assets ratio, debt-to-capital ratio, and debt-to-equity ratio have all remained at 0.00 for the years 2020 to 2024, indicating that the company has no significant debt burden in relation to its total assets, capital structure, or equity.
However, the financial leverage ratio has shown some fluctuation over the years, with a peak of 3.92 in 2023 and a low of 2.74 in 2024. This ratio measures the proportion of the company's assets financed by debt compared to equity. Despite the variation, the financial leverage ratio remains within a reasonable range, suggesting that Eversource Energy has a balanced mix of debt and equity in its capital structure, maintaining a healthy level of financial leverage.
Overall, the consistently low debt ratios and reasonable financial leverage ratio indicate that Eversource Energy is maintaining a solid solvency position, with a sustainable and well-managed capital structure.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 2.12 | 0.68 | 3.75 | 3.70 | 3.89 |
The interest coverage ratio for Eversource Energy has shown a slightly declining trend from 3.89 in 2020 to 3.70 in 2021 and then a slight increase to 3.75 in 2022. However, there was a significant decrease in interest coverage to 0.68 in 2023, indicating that the company's ability to cover its interest payments with its operating income deteriorated. This suggests a potential risk in meeting its interest obligations in 2023.
Fortunately, there was a recovery in the interest coverage ratio to 2.12 in 2024. While the ratio improved from the low in 2023, it remains below the levels seen in 2020 and 2021. Overall, the fluctuations in the interest coverage ratio over the years indicate varying levels of financial risk and the need for close monitoring of Eversource Energy's ability to meet its interest payments from operating income.