FirstEnergy Corporation (FE)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| 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 | 4.67 | 4.54 | 5.24 | 6.14 | 6.06 |
The solvency ratios of Firstenergy Corp., as indicated by the debt-to-assets, debt-to-capital, debt-to-equity, and financial leverage ratios, have shown some fluctuation over the past five years.
The debt-to-assets ratio, measuring the proportion of total assets financed by debt, ranged from 0.47 to 0.55 during this period. A higher ratio indicates a greater reliance on debt for financing assets. Firstenergy Corp. experienced a slight increase in this ratio from 2022 to 2023.
The debt-to-capital ratio, illustrating the percentage of capital structure represented by debt, fluctuated between 0.68 and 0.77. This ratio also increased in 2023 compared to the previous year, indicating a higher proportion of debt in the company's capital structure.
The debt-to-equity ratio, indicating the amount of debt used to finance the company relative to shareholders' equity, varied from 2.13 to 3.38. A higher ratio suggests a higher level of financial leverage and risk. Firstenergy Corp. observed an increase in this ratio in 2023, possibly signaling increased reliance on debt financing.
The financial leverage ratio, which measures the extent to which the company's operations are funded by debt, ranged from 4.54 to 6.14. This ratio also increased in 2023, reflecting a higher level of leverage.
Overall, the trend of increasing solvency ratios, particularly in 2023, suggests that Firstenergy Corp. may be taking on more debt to fund its operations and investments. This could potentially lead to higher financial risk and interest expense, which investors and stakeholders should monitor closely.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 2.22 | 2.35 | 2.41 | 2.13 | 2.09 |
Firstenergy Corp.'s interest coverage ratio, a key indicator of the company's ability to meet its interest payment obligations, has fluctuated over the past five years. The interest coverage ratio represents the company's ability to pay off its interest expenses with its operating income. A higher ratio indicates a stronger ability to cover interest costs.
The interest coverage ratio for Firstenergy Corp. was 2.38 in 2023, showing an improvement from the previous year. This suggests that the company's operating income was 2.38 times its interest expenses for the year, indicating a relatively healthy position in terms of meeting its interest obligations.
Comparing to the data from the previous years, the interest coverage ratio was 2.18 in 2022, 1.73 in 2021, 2.19 in 2020, and 2.61 in 2019. The ratio saw some fluctuations over these years, with the lowest point in 2021. However, it remained above 1 in all years, indicating that the company was able to cover its interest payments with its operating income.
Overall, it is important for investors and stakeholders to consider both the trend and the absolute values of the interest coverage ratio over time to assess the company's financial health and ability to meet its debt obligations.