FirstEnergy Corporation (FE)
Solvency ratios
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 4.67 | 4.53 | 4.48 | 4.53 | 4.54 | 4.16 | 4.16 | 5.10 | 5.24 | 5.86 | 5.97 | 5.99 | 6.14 | 5.97 | 5.94 | 6.18 | 6.06 | 5.71 | 5.62 | 5.84 |
Solvency ratios are crucial indicators of a company's ability to meet its long-term financial obligations. Analyzing the solvency ratios of Firstenergy Corp. from Q4 2022 to Q4 2023 provides insights into its financial health and stability.
The debt-to-assets ratio remained relatively stable over the period, fluctuating between 0.47 and 0.52. This ratio indicates that for every dollar of assets, Firstenergy Corp. had between 47 cents and 52 cents in debt, suggesting a moderate level of debt compared to its total assets.
The debt-to-capital ratio, reflecting the proportion of debt in the company's capital structure, also showed consistency, hovering around 0.66 to 0.73. This indicates that debt constituted around 66% to 73% of Firstenergy Corp.'s total capital, highlighting a reliance on debt financing.
The debt-to-equity ratio saw fluctuations from 1.94 to 2.65, indicating that Firstenergy Corp. had between $1.94 and $2.65 in debt for every dollar of equity. The increasing trend in this ratio suggests a higher level of financial risk due to a larger proportion of debt in the capital structure.
The financial leverage ratio, which measures the company's total assets relative to its equity, varied from 4.16 to 5.10. A higher financial leverage ratio signifies a higher level of financial risk, indicating that Firstenergy Corp. relied more on debt to finance its operations and investments.
Overall, the trend in solvency ratios for Firstenergy Corp. suggests a moderate level of debt relative to assets and capital, but an increasing reliance on debt financing over the period. The increasing debt-to-equity ratio and financial leverage ratio raise concerns about the company's long-term financial sustainability and ability to manage its debt obligations effectively. Further monitoring of these ratios will be essential to assess Firstenergy Corp.'s solvency and financial risk.
Coverage ratios
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | 2.22 | 2.37 | 2.44 | 2.38 | 2.35 | 2.42 | 2.48 | 2.37 | 2.41 | 2.22 | 2.25 | 2.48 | 2.13 | 1.74 | 1.68 | 1.70 | 2.09 | 2.43 | 1.63 | 1.58 |
Firstenergy Corp.'s interest coverage ratio has shown a consistent improvement over the quarters in 2022 and 2023. The interest coverage ratio measures the company's ability to meet its interest payments on outstanding debt with operating profits. The increasing trend in the interest coverage ratio indicates that the company's operating profits are stable and improving, making it easier for Firstenergy Corp. to cover its interest expenses.
The company's interest coverage ratio increased from 1.68 in Q3 2022 to 2.53 in Q3 2023, reflecting a significant positive trend in the company's ability to service its debt. This trend continued into Q4 2023 with an interest coverage of 2.38, further strengthening its financial position.
Overall, the improving interest coverage ratio suggests that Firstenergy Corp. is managing its debt obligations effectively and has sufficient operating income to cover its interest expenses. This positive trend bodes well for the company's financial health and indicates a reduced risk of default on debt payments in the future.