Eversource Energy (ES)
Debt-to-assets ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Long-term debt | US$ in thousands | 23,588,600 | 19,724,000 | 17,023,600 | 15,125,900 | 13,770,800 |
| Total assets | US$ in thousands | 55,612,200 | 53,230,900 | 48,492,100 | 46,099,600 | 41,123,900 |
| Debt-to-assets ratio | 0.42 | 0.37 | 0.35 | 0.33 | 0.33 |
December 31, 2023 calculation
Debt-to-assets ratio = Long-term debt ÷ Total assets
= $23,588,600K ÷ $55,612,200K
= 0.42
The debt-to-assets ratio of Eversource Energy has shown a consistent upward trend over the past five years, increasing from 0.38 in 2019 to 0.48 in 2023. This indicates that the company's proportion of debt relative to its total assets has been gradually increasing over this period.
A higher debt-to-assets ratio suggests that a larger portion of the company's assets is financed through debt rather than equity. While higher leverage can amplify returns on investment in good times, it also increases financial risk and interest payments.
Eversource Energy's increasing debt-to-assets ratio can imply a higher level of financial leverage, possibly undertaken for strategic reasons such as funding growth initiatives or capital projects. It is crucial for investors and stakeholders to monitor this ratio to assess the company's ability to manage its debt obligations effectively and sustain its financial health in the long term.
Peer comparison
Dec 31, 2023