Eversource Energy (ES)

Debt-to-capital 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 stockholders’ equity US$ in thousands 14,173,900 15,473,200 14,599,800 14,063,600 12,630,000
Debt-to-capital ratio 0.62 0.56 0.54 0.52 0.52

December 31, 2023 calculation

Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $23,588,600K ÷ ($23,588,600K + $14,173,900K)
= 0.62

The debt-to-capital ratio of Eversource Energy has shown a consistent upward trend over the past five years, increasing from 0.55 in 2019 to 0.65 in 2023. This indicates that the company has been relying more on debt financing relative to its total capital structure over this period.

A higher debt-to-capital ratio typically suggests that the company is more leveraged, meaning it has a higher proportion of debt in its capital structure compared to equity. While debt can be a cost-effective way to finance operations and growth, a high level of debt can also increase financial risk and interest expenses, potentially impacting the company's financial stability and flexibility.

It would be important for stakeholders and investors to monitor Eversource Energy's debt levels closely to ensure that the company can effectively manage its debt obligations and maintain a healthy balance between debt and equity financing. Additionally, it may be beneficial for the company to consider strategies to reduce its debt-to-capital ratio over time to mitigate potential risks associated with high leverage.