Evergy Inc. Common Stock (EVRG)

Solvency ratios provide insights into a company's ability to meet its long-term financial obligations. Looking at Evergy Inc's solvency ratios over the past five years, we observe a general increasing trend in debt-to-assets, debt-to-capital, debt-to-equity, and financial leverage ratios.

The debt-to-assets ratio has seen a gradual increase from 0.38 in 2019 to 0.42 in 2023, indicating that a higher proportion of Evergy's assets are funded by debt over the years.

Similarly, the debt-to-capital and debt-to-equity ratios have also shown an upward trend, reflecting an increasing reliance on debt in funding the company's operations and growth. The debt-to-capital ratio increased from 0.54 in 2019 to 0.58 in 2023, while the debt-to-equity ratio rose from 1.16 in 2019 to 1.36 in 2023.

The financial leverage ratio, which measures the company's total assets relative to equity, has fluctuated slightly but generally increased from 3.03 in 2019 to 3.21 in 2023. This suggests that Evergy's assets have been funded to a greater extent by debt over the years.

Overall, the increasing trend in these solvency ratios indicates a growing reliance on debt for Evergy Inc's capital structure, which may raise concerns about the company's financial risk and ability to manage its debt obligations effectively in the future. Stakeholders should closely monitor Evergy's debt levels and financial performance to ensure sustainable long-term financial health.

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Coverage ratios

Evergy Inc's interest coverage ratio has fluctuated over the past five years, ranging from a low of 2.45 in 2023 to a high of 3.66 in 2021. This ratio indicates the company's ability to meet its interest obligations with its operating income. A higher interest coverage ratio is generally considered favorable as it suggests that the company is more capable of servicing its debt.

The decreasing trend in Evergy Inc's interest coverage ratio from 2021 to 2023 may raise some concerns regarding the company's ability to comfortably cover its interest expenses. Investors and creditors typically prefer a stable or increasing interest coverage ratio as it signifies a healthier financial position. It would be important for Evergy Inc's management to closely monitor its interest coverage ratio and take appropriate actions to ensure the company maintains a solid financial footing.